Masonite International Corporation (B): Will KKR Slam the Door Harvard Case Solution & Analysis

It was February 16, 2005, and James Edgar, of Merrill Lynch, one of the leading investment banks, was to view the file on leveraged buyout (LBO) of Masonite International Corporation (Masonite). A couple of months ago, Kohlberg, Kravis and Roberts (KKR), one of the oldest and largest private equity firms, has teamed up with top managers of Masonite and offered to take the company private US $ 2.52 billion LBO. Shareholders' meeting to vote on the deal was scheduled for less than 48 hours, but it was very likely that the transaction will be rejected. Most of the large shareholders have already said they will reject the deal, arguing that the premium offered by KKR was not enough. As the team leader Merrill Lynch, working in the LBO, Edgar was to complete its recommendation before talking Masonite Board of Directors. KKR was going to come out? In the end, there was an increase in concern about the profitability and prospects of building products company and Masonite in particular, due to the ever-increasing cost of raw materials, the negative impact of tighter monetary policy on consumer spending and mortgage rates, and controversial health of the housing market. Masonite but still one of the best positioned companies in the industry, with strong earnings and cash flow. Will this be enough to entice KKR to increase their offer? "Hide
by Barbara S. Petitt, F. John Mathis Source: Thunderbird School of Global Management 19 pages. Publication Date: July 25, 2011. Prod. #: TB0273-PDF-ENG

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