Telsys Case Study
British Cooperation: 1, 800, 000/43, 711, 944= 5. 12%
ITC Holdings: almost eight, 761, 994/43, 711, 944= 20. 04%
We know that the available quantity of fairness left is roughly 76% after the British institutions and ITC get their stocks. Therefore , the 76% will probably be split based on the amount of investment VCG makes, which will be ranging from $7-10. 4 , 000, 000.
VCG invests: 7 million= 7, 500, 000 * (1/. 52) = 13, 461, 538 shares which will would drop them off with a 30. 8% investment in the firm. VCG, nevertheless , understand that Chesney and Telsys are entirely relying on all their investment, therefore , giving them the ability to negotiate to get a higher percentage hold of the ITC inventory.
VCG Spends: Maximum 12. 4 million= 10, 400, 000 2. (1/. 52) = twenty, 000, 000 shares departing them with a 45. 75% expenditure in the organization. Thus VCG will want minimal a 45. 74% hold on the ITC stock. This scenario might leave Chesney/Telsys with a thirty percent hold of the ITC inventory.
If VCG invests twelve. 4 mil they will probably end up being tied to a 45. 75% hold of the ITC share. Mainly, since they demonstrate that they are extremely interested in the investment and can not have much room to get negotiation
In the event VCG spends 7 mil, they will be able to get a bigger percentage your hands on the ITC stock, due to the fact that Telsys is very relying on all their investment
Range of negotiation:
VCG Range: 46-35%
Telsys Range: 40-30%
Since I feel the strength of the BOD should be assigned to the Telsys presidents and managers over VCD and Current ITC shareholders, I actually also assume that the chairman of the Panel should be a high ranking recognized at Telsys such as Generic Montgomery. In the event this does not happen, however , I really believe whichever companies is given even more representation in the BOD must also be given the position of Chairman of the plank. Within the negotiation process this will likely most likely not take place, so it would be a probable scenario to both accept obtaining the Chairman or...