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  • Cooper Industries Case Questions

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    Alex Garma
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    Cooper Industries is considering acquiring Nicholson and has four questions: 1) What is the maximum price Cooper can pay without losing money if it reduces Nicholson's WCR/Sales ratio to 35%? 2) What is the minimum price Cooper must pay based on a competing bid from VLN? 3) Whether Cooper should pay for Nicholson with cash, shares, or a mixture? 4) How Cooper's 4.99% toehold in Nicholson can help its bidding strategy.

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    Cooper Industries is considering acquiring Nicholson and has four questions: 1) What is the maximum price Cooper can pay without losing money if it reduces Nicholson's WCR/Sales ratio to 35%? 2) What is the minimum price Cooper must pay based on a competing bid from VLN? 3) Whether Cooper should pay for Nicholson with cash, shares, or a mixture? 4) How Cooper's 4.99% toehold in Nicholson can help its bidding strategy.

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    48 views1 page

    Cooper Industries Case Questions

    Uploaded by

    Alex Garma
    Cooper Industries is considering acquiring Nicholson and has four questions: 1) What is the maximum price Cooper can pay without losing money if it reduces Nicholson's WCR/Sales ratio to 35%? 2) What is the minimum price Cooper must pay based on a competing bid from VLN? 3) Whether Cooper should pay for Nicholson with cash, shares, or a mixture? 4) How Cooper's 4.99% toehold in Nicholson can help its bidding strategy.

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    © All Rights Reserved
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    IV Questions for Cooper Industries

    1 What is the maximum price Cooper can pay for Nicholson so that it does not lose
    money? Assume that Cooper can also reduce WCR/Sales of Nicholson to 35 %.
    2. What is the minimum price Cooper has to pay, i.e. what is the value of the
    competing VLN bid?
    Assume that, considering the declining conversion ratio, it is optimal to convert the
    convertible preferred stock one year from now.
    3. How should Cooper pay for Nicholson? Cash, shares or a mixture?
    4. How does the toehold of 4.99 % helps Cooper in its bidding strategy?

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