Assignment Task -
For this assignment, you should analyse the merger between Seven West Media Limited (ASX: SWM) [Acquirer] and Prime Media Group Limited (ASX: PRT) [Target] announced on October 18, 2019. You should analyse the deal based on the information available at the time the deal was announced.
- The assignment write-up should be about 1000 words (up to 2 pages long).
- You can add one more page of appendix of tables and graphs.
- You should make your own graphs and tables --- do not copy graphs and tables from other sources. ? You should include a list of references --- this will not count towards the page limit.
- Your write-up should address the following points:
- Overview of acquirers’ industry and its business and discussion of acquirer’s business plan/strategy and its merger strategy (about one page)
- The analysis should be based mainly on lecture 2 and include the following elements: o Industry analysis:
- Focus your discuss on cyclical or structural changes that the industry might be undergoing that might be relevant for the merger Company analysis:
- Analyse recent (last five years) financial performance and trends in performance of the acquirer (and the target)
- Focus on financial performance and trend that might be relevant for the merger o Devise/analyse company strategy based on the industry and company analyses above o Devise/analyse company’s merger strategy: should
- What kind of companies should the acquirer acquire based on your analysis?
- Deal Rationale (about one page)
- Justify or criticise the deal concept and explain the logic (or lack thereof) of the deal. o Using tools and concepts from lecture 1 and the three slides on synergy in lecture 3, describe the motivations and the rationale for the deal.
- What are the sources of synergy? Be specific and detailed.
- What are the other potential sources of value creation in this deal?
- What other objectives/reasons are behind the deal?
- Are there bad reasons for the deal?
- Was the deal reasonably priced and correctly timed?
- Try to link the deal rationale with the industry/company analyses above.
- How does the current deal fit with your analysis (of acquirer’s business/merger strategy) of the kind of targets the acquirer should pursue --- i.e., is this deal a good ‘strategic fit’ for the acquirer?
- Does the deal make sense in a long-term or ‘strategic’ sense?
- The bullet-points above are given as a guide to organise your write-up.
- You do not need to address all the bullet points, and you may want to use other concepts/frameworks from lectures 1 & 2 and part of lecture 3, including the annex slides, in your write-up.
- Please be aware that all factors are not equally important in all deals, so you should vary the emphases on different points as appropriate.
- Try to think what is the strategic challenge facing the industry and the firm, and what are the major reason(s) for this particular deal.
- Then organise your write-up so the analyses support your conclusions on these issues. ? Your write-up should be based on thorough research. You should use all of the following sources to gather the necessary background information:
Some additional guidelines:
- You should support your arguments and claims with evidence.
- Your analyses should build up to a conclusion, and should not be just a series of unconnected observations and statements.
- You should not include information that is not relevant for your arguments and conclusions. o The language of the report should be clear, concise, coherent and grammatically correct.
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