Case ID: 291033     Solution ID: 920     Words: 1597 Price $ 75

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.?