This article requires the practical application of the most popular business valuation methodologies (discounted cash flow evaluation, peer businesses multiples and comparable transactions evaluation) in order to identify a range of mutually acceptable exchange ratios. Moreover, this article also wants the students to carry out a critical appraisal of the tacit bid premium. The investigation is focused on the complex discussions of the scheme of arrangement (amalgamation) between commodity trader giant, Glencore and the diversified miner, Xstrata.
This article requests the knowledge of basic valuation methodologies together with the ability to identify the strategic synergies caused by the integration. Also, it wants an understanding of the bid premium which determine the distribution of synergies between the parties in all-stock transactions.
Publication Date: 06/09/2014
This is just an excerpt. This case is about Accounting about Accounting
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