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Interco Case Solution
Case Solution
Interco has been guided by Wasserstein Perella to not accept an offer of $70 per share for the organization. The case presents the different types of assessments used by Wasserstein Perella and encourages a discussion of the decisions pertaining to Interco’s board as well as Wasserstein Perella.
Excel Calculations
WACC Calculations
Comparable Transaction Analysis
Business Segment 1988 Sales Multiple Range Value Range Median Value Business Segment 1988-Operating Cash Flow Multiple Range Value Range Median Value
Interco Balance Sheet
Interco Segments Financial Information
Daily Stock Price of Investo
Monthly Stock Price of Investo
Questions Covered
Assess Interco's financial performance prior to the Rales brothers' offer. Why doyou think the company was a target of a hostile takeover attempt?
As a member of Interco's board are you persuaded by the premiums paid analysisand the comparable transactions analysis? Why?
Wasserstein, Perella & Co. established a valuation range of $68-80 per commonshare for Interco. Show that this valuation range can follow from the assumptionsdescribed in the discounted cash flow analysis provided (exhibit 12). As a member ofInterco's board, which assumptions might you have questioned?
What are your reactions to the roles played in Interco's situation by its board ofdirectors? by Wasserstein, Perella & Co.?