You have just been appointed the Corporate Financial Officer (CFO) of a FTSE 100 company. In your first meeting of the BODs, the idea of diversifying the idiosyncratic risk of the firm was considered. The board approved that the best strategy to accomplish this goal is an acquisition. It is the policy of management to act in the best interest of the shareholders.
Therefore, management would only approve a tender offer that generates a positive net present value. To meet the objective of acquisition strategy you are required to identify and value a target company from FTSE 250.
You are to write a report to the Board of Directors in the appropriate format justifying your recommendation of a tender offer for the target company. Your report must include appropriate sections dealing with the forecast and valuation of future cash flows that would be created as a result of any takeover synergies that you propose. Your report must also include a discussion of any qualitative factors that may affect the decision to undertake the acquisition.
Note: • Students may only choose a target company that no other student has chosen. (CHOSEN COMPANY: Ocado Plc.)
• While you may decide to assume the acquiring company, it is not necessary for the purpose of the coursework
• Maximum number of words: 3000 ( You can include your tables/calculations as an appendix)
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