Reference no: EM131045576

QUESTION 1:

Two companies, Syed Soffian Co Malaysia Ltd (SCML) and Hanafiah Omar Co Pakistan Ltd (HCPL) engaged in the production of similar products namely household items such as washing machines and vacuum cleaner .They decided to merge together two years ago. The industry welcome such mergers since it will lead to removing excess capacity and increase efficiency.

Contrarily, the present merged companies showed production decline, operation and financial cost increase .The share price is slipping and bank refused to provide further credit facilities.

a) What could be possibly wrong with this mergers based on McKinnsey industry studies.

QUESTION 2:

Brands have become an important driver of acquisition since it adds value creation .However the study done on the acquisitions on Chrysler acquisition by Mercedes-Benz did not shows such result. It is further stated that Mergers acquisition has effect on the brand.

Explain How is the acquisition of brands need to be managed properly in order to create value for the newly merged entity.

QUESTION 3:

Corporate restructuring is a change in the business strategy of an organization resulting in diversification, closing parts of the business, and to increase its long-term profitability. Among others, sell-off and spin-off are the common strategy used.

Discuss and distinguish sell-off and spin offs with illustration.

QUESTION 4:

Lady Macbeth strategy has been adapted by corporate raider and the target company need to defense her selves from hostile takeover.

Explain how this strategy has been used to achieve the real intention of the acquirer.

QUESTION 5:

The integration model of the acquirer and acquiree will in the long terms determine the success of merger and acquisitions.

With the help of diagram outline the alternative model to integrate mergers acquisitions and explain the implementation process.

QUESTION 6:

On June 7, 2016, Niagara Fall Limited (NFL) privately approached two companies, Victoria Falls Corporation (VFL) and Hoover Fall Limited (HFL), and asked them if they were interested in a strategic merger with NFL.  Both companies indicated interest, so NFL provided them with full access to any NFL documents they needed.  In return for that access, VFL and HFL each entered into standstill agreements.

a)What are the salient features of this standstill agreement.

b) Why VFL and HFL agreed to sign standstill agreement

QUESTION 7:

Upon its establishment in March 1993, the Securities Commission inherited the merit-based regulation (MBR) regime but in 1996, the Securities Commission decided that a shift to disclosure-based regulation (DBR) is necessary progression for the Malaysian capital market to become more efficient and to develop into a sound and credible market of international standing.

a) What are the main arguments against Merit based Regulation

b) List the differences between MBR and DBR in the issue and offering of securities in the  primary market by public companies