Times Mirror Co. PEPS Proposal Review Case Solution
Times Mirror Co. (TMC) owns a considerable block of Netscape’s stock which was common and was bought before its IPO on which it's considerable unrealized gains. TMC is restricted from offering the stock in a IPO and hence, considering a proposition by Morgan Stanley to issue PEPs in order to monetize the holdings of Netscape.
These PEPS be redeemable in five years at a price tied to the value of Netscape shares, subject to call provisions and specific formulas efficiently focusing on the advantages in the company’s stock somewhere between TMC and the PEPS investors and would pay interest quarterly. The tax treatment of the PEPS, while cloudy, is of vital relevance.
PUBLICATION DATE: April 19, 1996
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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