Privatization Of Antolia National Telekom Harvard Case Solution & Analysis

Valuation of ANT

The main problem in valuation stems from the focus on a highly diversified portfolio for the company. The several shareholders for 49% and one or two core shareholders for rest of the investments create a highly volatile market valuation for the company. It further creates a diversification of valuation being placed by many investors involved.

Valuation during Negotiation

Due to conflict of interests arising between parties involved in the negotiation process, the valuation on pricing and acquisitions keep on changing. This is because the contracting parties will focus on maximizing their individual prices. As an intermediary CORA should focus on win-win situation for the parties. Given that privatization authority has incurred more losses than profits, CORA needs to come up with a solution that is applicable to both the parties. The fluctuations between price margins occur due to the parties feeling that the other party is not employing cost cutting methods when naming high prices.

It is essential for CORA to ensure that privatization authority also benefits from the transaction. CORA will have to focus on one valuation of price of the firm that will be applicable to all. For this it will have to evaluate the financial statements of both the contracting parties to settle on a valuation price that is applicable to both

Privatization Of Antolia National Telekom Harvard Case Solution & Analysis

Negotiation Strategy

The negotiation strategy should be win-win, particularly given that the intermediary (CORA) is involved in the process. The main focus of CORA should have been on drafting a plan that results in both the parties being satisfied from the outcome. However, a long drag of one year has even resulted in expenses for the intermediary itself instead of gaining revenues in the form of fees for its services, as it is a work based reward system in which they are operating.

The negotiation strategy this time around should focus on the new goals outlined by CORA and the strategies to be implemented for achieving those goals. Particular emphasis should be put on time limitations which would enable both the parties to come up with an acceptable price quickly and set out the term and conditions with an option of amendments being made inlater days.

Personal Experience

In carrying out the negotiation process between privatization authority and prospective private key investors, CORA will have to focus on the technical aspects of the process including a possible deadlock or withdrawal. Based on the dragging nature of the ongoing negotiations a swift action needs to be taken like focusing on the time duration and determining a price for taking the process to the next step.

By analyzing the weaknesses of the negotiation process and the stance of the parties, CORA should not employee a win-lose situation in favor of privatization authority given that they have been incurring losses in past privatizations that have taken place. This win-lose strategy can also be in the form of setting a time limitation which would pressurize the private shareholders on determining a suitable price in favor of privatization authority.

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