Times Mirror Co. PEPS Proposal Review Harvard Case Solution & Analysis

Times Mirror Co (TMC) have a significant block of Netscape common stock acquired before the IPO of Netscape, with which it has significant unrealized gains. TMC restricted from selling shares public offering and why Morgan Stanley is considering a proposal to issue equity premium Participation Securities (PD) to monetize its stake Netscape. These PEPS will pay interest quarterly and repayable over five years at a price linked to the value of Netscape shares, subject to certain formulas and call provisions effectively distributing up in Netscape stock between TMC and PEPS investors. Tax treatment of PEPS, while unclear, is important. "Hide
by Peter Tufano, Cameron Poetzscher Source: Harvard Business School 15 pages. Publication Date: April 19, 1996. Prod. #: 296089-PDF-ENG

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