Buffet Case Study Executive Summary: On May 24‚ 2005‚ it was announced that Berkshire Hathaway would acquire PacifiCorp. from parent‚ Scottish Power‚ for $5.1 billion in cash and $4.3 in liabilities and preferred stock (Bruner‚ Eades‚ Schill). After the announcement of the acquisition‚ the market responded very positively the same day. Berkshire’s stock price had increased by 2.4%‚ PacifiCorp.’s parent‚ Scottish Power’s by 6.28% and S&P 500 closed up 0.02%. Berkshire Hathaway’s 2.4% shares increase
Premium Warren Buffett Berkshire Hathaway Investment
acquisition announcement? Specifically‚ what does the $2.55 billion gain in Berkshire’s market value of equity imply about the intrinsic value of PacifiCorp? 2. Based on the multiples for comparable regulated utilities‚ what is the range of possible values for PacifiCorp? What questions might you have about this range? 3. Assess the bid for PacifiCorp. How does it compare with the firm’s intrinsic value? As an alternative‚ the instructor could suggest that students perform a simple discounted cash-flow
Premium Berkshire Hathaway Stock market Warren Buffett
the value of Berkshire Hathaway say about the intrinsic value of PacifiCorp? The increase in the stock price of Scottish Power plc and Berkshire Hathaway indicate a market approval for the acquisition and created value for both buyers and sellers. 2. Based on the multiples of comparable regulated utilities‚ what is the range of possible values for PacifiCorp? We find the range of possible values for PacifiCorp in Exhibit 10. i. Revenue median of $6.252
Premium Management Customer service Strategic management
does the $2.55 billion gain in Berkshire’s market value of equity imply about the intrinsic value of PacifiCorp? PacifiCorp had a very large amount of investors/stockholders as indicated in the footnote‚ which contributed to the large increase in Berkshire’s market value of equity. 2. Based on the multiples for comparable regulated utilities‚ what is the range of possible values for PacifiCorp? What questions might you have about this range? Already firmly placed in the energy sector of the
Premium Berkshire Hathaway Warren Buffett Investment
Berkshire’s market value of equity imply about the intrinsic value of PacificCorp? 2 Based on the multiples for comparable regulated utilities‚ what is the range of possible values for PacifiCorp? (I am looking for numbers‚ but they are given in the case). 3 Assess Berkshire’s bid for PacifiCorp. Does it make sense given your answer to #2? Hint: How was has Berkshire Hathaway performed in the aggregate? What about some of its specific investments such as MidAmerican Energy Holdings?
Premium Berkshire Hathaway
billion gain in Berkshire’s market value of equity imply about the intrinsic value of PacifiCorp? a. The possible meaning of the changes in stock price is due to the fact that the deal created value for both buyers and sellers; Berkshire was more diversified after the acquisition. b. The $2.55 billion gain in Berkshire’s market value of equity implied that the intrinsic value of PacifiCorp was good because it fell within the range of competitors based on the following calculations:
Premium Berkshire Hathaway Warren Buffett
meaning of the changes in stock price for Berkshire Hathaway and Scottish Power plc on the day of the acquisition announcement? Specifically‚ what does the $2.55 billion gain in Berkshire’s market value of equity imply about the intrinsic value of PacifiCorp? Berkshire purchased PacificCorp for $5.1B cash and $4.3B in liabilities and preferred stock‚ a transaction valued at $9.4b. On the day of the announcement‚ both Berkshire and Scottish Power stocks jumped. The market seemingly reacted positively
Premium Berkshire Hathaway Warren Buffett Stock market
the acquisition announcement? Specifically‚ what does the $2.17-billion gain in Berkshire’s market value of equity imply about the intrinsic value of PacifiCorp? Based on the multiples for comparable regulated utilities‚ what is the range of possible values for PacifiCorp? What questions might you have about this range? Assess the bid for PacifiCorp. How does it compare with the firm’s intrinsic value? As an alternative‚ the instructor could suggest that students perform a simple discounted cash flow
Premium Stock market Berkshire Hathaway Warren Buffett
meaning of the changes in stock price for Berkshire Hathaway and Scottish Power plc on the day of the acquisition announcement? Specifically‚ what does the $2.55 billion gain in Berkshire’s market value of equity imply about the intrinsic value of PacifiCorp? Answer1: The increase in the stock price of Scottish Power plc and Berkshire Hathaway indicate a market approval for the acquisition and created value for both buyers and sellers. Answer2: a. the possible meaning of the changes in stock price
Premium Berkshire Hathaway Warren Buffett
and chief executive officer (CEO) of Berkshire Hathaway Inc.‚ announced that MidAmerican Energy Holdings Company‚ a subsidiary of Berkshire Hathaway‚ would acquire the electric utility PacifiCorp. In Buffett’s largest deal since 1998‚ and the second largest of his entire career‚ MidAmerican would purchase PacifiCorp from its parent‚ Scottish Power plc‚ for $5.1 billion in cash and $4.3 billion in liabilities and preferred stock. “The energy sector has long interested us‚ and this is the right fit
Premium Berkshire Hathaway