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

Prosthetic components in implantology, Implants and implant systems since i...

Implants and implant systems since inception have been in continuous state of flux in terms of its design and surface. Likewise there has been a subtle change in the implant surgic

Problem in computation of retained earnings, Q. Problem in computation of r...

Q. Problem in computation of retained earnings ? Problem in computation of retained earnings: it is sometimes argued that retained earning do not involve any costs. But in the

On-the-run treasury issues and selected off-the-run treasury, The wid...

The wide gap between maturities poses problems in using the on-the-run issues, especially after five years. Some dealers and vendors use selected off-the-run Trea

Short terms working capital, Q. Short terms working capital? 1) Indige...

Q. Short terms working capital? 1) Indigenous bankers: private money leased and other country banking used to be the only source of finance prior to the establishment of the

Calculate total development cost, A developer has purchased a commercial of...

A developer has purchased a commercial office site in Melbourne and wishes to develop a building which will be sold to an institutional owner before completion of the building.

Conversion privilege, In convertible bonds, bondholders get a right t...

In convertible bonds, bondholders get a right to convert their bonds for a specific number of shares of the bond issuer. This privilege allows bondholders to take

Asset Securitization Structures (Excel help), #questAs an assistant vice pr...

#questAs an assistant vice president at a regional bank, your boss has tasked you to acquire $100 million of residential mortgages to be securitized in a pass-through MBS. There mu

Corporate bonds, Corporate bonds are debt securities issued by privat...

Corporate bonds are debt securities issued by private and public corporations. These bonds are issued to meet specific requirements like building a new plant, pur

Define when u.s. dollar weakens in foreign exchange market, What does it me...

What does it mean when the U.S. dollar weakens in the foreign exchange market? While the U.S. dollar weakens in the foreign exchange market one U.S. dollar buys smaller amount un

Impact of the yield level in bonds, Different bonds trade at differen...

Different bonds trade at different yields though the coupon rate, maturity, and embedded options are same for them. Assuming that all the other bond characteristi

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