Assess Interco's Financial Performance. Why Is the Company a Target of a Hostile Takeover Attempt?
Autor: amina_aidar • December 9, 2015 • Essay • 389 Words (2 Pages) • 1,833 Views
If we look at company’s important consolidated statement of earnings’ items as sales and net earnings we would observe an improvement of sales and net earnings over year 1987 by 4.043% and 4.944% , respectively. And over year 1988 by 13.388% and 15.289%, respectively. Also we can notice divisional activity decline in the company. For example, general retail and apparel manufacturing divisions are struggling while footwear and furniture divisions improved in their activities. Therefore, since the overall performance of the company is improving, although some divisions are not pulling their weight, this means the stock price might be undervalued (due to the inefficiencies). Thus, Interco is a viable target for takeover and restructuring. In addition to being a target of takeover, Interco is is likely to be the target of a hostile takeover due to the attitude of management within the organization. In this situation, Interco’s management has made it clear that they do not want to be taken over; management feels that the firm can be turned around by restructuring and selling off the apparel and general retail division. Therefore, in general, management is more likely to have a higher opinion of the value of the firm than the acquiring firm. This appears to be the situation with Interco and the current offer from City Capital Associates. |
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