Estimate effect of synergies on enterprise value

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This case calls for you to reevaluate the price Oracle should pay to acquire its long-term business partner, Sun Microsystems. The emergence of new suitors (e.g., IBM) forced Oracle's corporate development team to go back to the drawing board and reevaluate all the assumptions they previously made in putting together the initial bid of $7.38 million, or $9.50 per share, on April 17, 2009. You will need to value Sun's stock and take a position on whether there is any room left to sweeten the offer if a bidding war unfolds with other potential buyers. The case outlines the Oracle strategy and how long-term partnering with Sun contributed to it to date. It also allows for an in-depth discussion of the changing competitive landscape of the technology industry.

  • Identify the synergies and conduct a sensitivity analysis to estimate the effect of synergies on enterprise value.
  • If a competing bidder appears, how high a price should Oracle be willing to offer?

Reference no: EM133074830

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