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

Compare potential liability of owners of proprietorships, Compare and contr...

Compare and contrast the potential liability of owners of proprietorships, partnerships (general partners), and corporations. The sole proprietor has infinite liability for mat

Define the general principles of the city code, Define the General princi...

Define the General principles of the city code General principles of the city code Information available to all shareholders and shoul

Calculate the companys horizon value, A. Mitt starts Examine Your Zipper In...

A. Mitt starts Examine Your Zipper Incorporated ("XYZ") in 2012 by selling common stock of $12,000,000. He promises the investors in his company a 15% return on their capital. B

Compounded value of a series of cash flows, Compounded Value of a Series of...

Compounded Value of a Series of Cash Flows: - We have considered merely single payment made once as well as its accumulation effect. An investor possibly interested in investing mo

Describe about self-employment tax, Q. Describe about Self-Employment Tax? ...

Q. Describe about Self-Employment Tax? Self-Employment Tax - Most individuals who are in business for themselves, like PARTNERS, SOLE PROPRIETORS or independent contractor ar

Pay back period (pbp) , Pay Back Period (PBP) : This is the most popula...

Pay Back Period (PBP) : This is the most popular method employed by industrial practitioners for ranking investment projects. This is described as the "period required for a pr

What are the characteristics of the financing decision, What are the Charac...

What are the Characteristics of the financing decision There are two characteristics of the financing decision. First, theory of capital structure which illustrates theore

Location of lifting anchors in precast concrete units, Q. Location of lifti...

Q. Location of lifting anchors in precast concrete units? It is desirable that position of anchors be located symmetrical to the centre of gravity of precast concrete units. Or

Pros and cons of simulation technique, Pros and Cons Simulation techniq...

Pros and Cons Simulation technique allows experimentation with a model of the real life system. Whenever experimenting with the system itself is risky and/or costly, simulation

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