Financial management, Financial Management

Assignment Help:

BigGardens Ltd (BigGardens) is a private company that owns and operates a chain of garden centres in the Bristol area.  The company has expanded rapidly over recent years, opening new sites frequently, mainly using retained profits to finance them.  The directors have found there are significant economies of scale in operating garden centres and they are keen to expand more rapidly by extending their geographical horizons.

The directors have reason to believe that Percy Ltd (Percy) might be for sale.  Percy operates fifteen garden centres in the West Midlands. The freeholds of ten of these sites are owned by Percy, the other five being leased under arrangements that expire in four years' time. Percy is owned by three sisters and their families.  The sisters are in their sixties and the directors of BigGardens believe that a reasonable offer would persuade the directors of Percy to sell the company.

You are a manager at BigGardens's auditors and the directors have asked you, as the only person whom they know and trust and with any knowledge of the subject, to meet them to provide some idea of the issues involved with a possible deal.

During the telephone conversation, when the meeting was requested, one of the BigGardens directors said

              "We are asking for this meeting because we haven't any experience of anything like this.  Should we be considering this deal in the first place?  Assuming that we decide to go ahead, can we get someone to help us with it?  How much should we offer to Percy?  How should we pay?  If we have to pay in cash, how could we raise it?  Is it best to buy the assets from Percy or buy all of the shares in Percy?  Should we go straight to the Percy directors or get someone to act for us?  Are there any other issues that you feel that we should consider?"

In preparation for the meeting you intend to make notes of the points you will raise with the directors.  You are aware that the directors are people who have skills in horticulture and retailing, but not in more general business issues, particularly not in finance.


Related Discussions:- Financial management

Guaranteed income supplement, In addition to the public pension plans, Rob ...

In addition to the public pension plans, Rob and Ellen also have RRSPs.  What options will they have when they retire if they want to draw money from their RRSPs?  Identify one str

#title.OPERATING CYCLE, DISCUSS THE APPLICABILITY OF OPERATING CYCLE IN VEG...

DISCUSS THE APPLICABILITY OF OPERATING CYCLE IN VEGETABLE GROWING.

Explain the term phishing, QUESTION (a) (i) Describe briefly two potent...

QUESTION (a) (i) Describe briefly two potential E-Banking risks that may have an adverse impact on banks. (ii) Outline some measures to control these two risks. (b) Outli

Show limitations of profit maximization, Q. Show Limitations of Profit maxi...

Q. Show Limitations of Profit maximization? The Profit maximization criterion is criticized on the following grounds: i) Quality of Benefits: Profit maximization approach ig

Advantages to the investors, Advantages to the Investors: The warran...

Advantages to the Investors: The warrant acts as a sweetener and ensures a better subscription to the NCDs, especially for companies with good track record. NCDs with warran

What is nvp and cost of equity , 1. A standard arrangement for the orderly ...

1. A standard arrangement for the orderly retirement of long-term debt calls for the corporation to make regular payments into a(n):      A)  custodial account.     B)  sinking

Global bond sectors and instruments, Treasuries are the securities that the...

Treasuries are the securities that theUS government issues for the completion of government projects. They are of different types like, treasury bills, treasury bon

Exchange rate changes decrease risk of foreign investment, Would exchange r...

Would exchange rate changes all time increase the risk of foreign investment? Discuss the condition within which exchange rate changes may actually decrease the risk of foreign inv

Caselet 2, Suggestion regarding Credit limit. Should it be approved or not,...

Suggestion regarding Credit limit. Should it be approved or not, what should be the amount of credit limit that electronics give to Booth Plastics.

What are the financing methods, Q. What are the financing methods? - Th...

Q. What are the financing methods? - The export transaction could be correlated to a bill of exchange. If this bill was established (guaranteed) by the bank it could be discoun

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd