AFM373 Lecture Notes - Lecture 11: Scotiabank, Oshawa Group, Net Present Value

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM373
• Professor: Alan Douglas

Document Summary

Oshawa group has become an attractive target for empire, a scotia capital client. Oshawa has been tightly held by the wolfe family, but the recent resignation of. Jonathan wolfe may indicate the door is open to m&a. Empire is looking to expand beyond atlantic canada. Need to calculate value of possible m&a and gain the wolfe family"s support. Perform a dcf to calculate firm value. Positive npv firm value for empire. Desire to realize the value of a pure play spinoff. Wolfe family"s preference for more cash than stock. Empire"s desire to maintain an a debt rating. Empire"s required majority ownership of all companies. Essential to not overpay or enter into bidding war. New competition from non -traditional vendors (drug stores, wholesale, online, etc) Growth is primarily through m&a: cheaper to acquire competitor than open new store, mitigate risks such as lack of local knowledge, attracting qualified workforce, etc. Beating competitors with cost efficiencies and marketing.