syllabus ma ss+2013

8/22/2019 Syllabus MA SS+2013

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Mergers & Acquis itions (MEAC) Summer term 2013

Syllabus

Elective Master level courseFinance Department

Lecturers: Mark Wahrenburg & J an Weidner (Jan Weidner will teach on 1 or more days).Teaching assistant: Nora Bock

Lecture room: HZ8 & HZ12

Class days: Tuesday, 14.15 15.45 (every 2nd week)Thursday, 12.15 13.45 (weekly)

Class schedule:1. Termin: DO, 18.04.2013 in HZ 122. Termin: DI, 23.04.2013 in HZ 83. Termin: DO, 25.04.2013 in HZ 124. Termin: DO, 02.05.2013 in HZ 12 J an Weidner teaches the class5. Termin: DI, 07.05.2013 in HZ 86. Termin: DO, 16.05.2013 in HZ 12

7. Termin: DI, 21.05.2013 in HZ 88. Termin: DO, 23.05.2013 in HZ 129. Termin: DI, 04.06.2013 in HZ 810. Termin: DO, 06.06.2013 in HZ 1211. Termin: DO, 13.06.2013 in HZ 1212. Termin: DI, 18.06.2013 in HZ 8 Guest lecture Dr. Brigitte von Haacke13. Termin: DO, 20.06.2013 in HZ 1214. Termin: DO, 27.06.2013 in HZ 1215. Termin: DI, 02.07.2013 in HZ 816. Termin: DO, 04.07.2013 in HZ 1217. Termin: DO, 11.07.2013 in HZ 12

18. Termin: DI, 16.07.2013 in HZ 819. Termin: DO, 18.07.2013 in HZ 12

DO, 09.05.2013 no class (Christi Himmelfahrt)DO, 30.05.2013 no class (Fronleichnam)


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Preface

M&A has always been considered to be one of the most prestigious areas within invest-ment banking. The customers of professional M&A advisors are primarily CEOs, CFOsand other directors of large and medium sized corporations. These customers expecttheir advisors to have broad expertise and work hard - often until late in the evening.

Real world M&A cases exhibit challenges in various disciplines, ranging from account-ing, legal, and financial issues to areas such as negotiation skills and psychology. As aresult, M&A is a field where even professionals never stop learning and studentssometimes feel confused by the complexity of the issues. If you look for a course wherecredit points are easily earned with little effort, you should not consider this course. Ifyou look for a course, where the scope of exam preparation work is clearly and preciselydefined, you may be better served with other courses. If you are anxious to dive into thecomplexities of real world M&A and corporate restructuring decision making, you willmost likely enjoy this course very much.

The course Mergers and Acquisitions is interactive and case based. For this reason,every student is expected to show up in the class room for every class session and isexpected to actively participate in the class discussion. Every student is expected toprepare various homework assignments and shall also be prepared to present his or herfindings in class. The course includes cases studies which are complex and require a lotof time for preparation. Please anticipate also that there is no such thing like the correctsolution to many case studies and M&A related questions including the final exam.

Course Description

Corporate managers and their professional advisors must be familiar with major corpo-rate restructuring transactions. These include mergers & acquisitions (M&A), but alsosell-offs, spin-offs, equity carveouts, share repurchases, and leveraged recapitaliza-tions among others. This interdisciplinary course draws from finance, economics, law,accounting and strategy to build a framework for understanding these transactions. Thecourse takes seriously the often-conflicting goals of key players - directors, managers,stockholders, creditors, and employees - each trying to maximize their own interestssubject to various behavioral, legal, and market constraints.

The course begins with an examination of the structure and governance of the publiccorporation. The conflicts of interest between corporate managers and stockholders,which are often key issues in M&A transactions, are identified and the market forces

and legal rules that help to resolve these conflicts are discussed. The course also pro-vides practical training in the various valuation techniques that real-world managersand professional advisors use to evaluate restructuring transactions. Students are ex-pected to use these techniques to analyze the restructuring transactions under discus-sion. At the same time, the course deals straightforwardly with the limits of these tech-niques.

Next, the course covers the theoretical rationales for each of the various restructuring


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transactions. The available empirical evidence is examined to help sort out which moti-vations are most important and to shed light on how the transactions impact the welfareof managers, stockholders and other corporate stakeholders. Students completing thecourse successfully should be well positioned to better understand and take part in ma-jor corporate restructuring efforts, without falling prey to black-box analytical argu-

ments that often hide the complexity and uncertainty of the restructuring landscape.

Learning Objectives

Upon completion of this course, you will be able to:

1. Apply discounted cash flow approach to firm valuation2. Anticipate the capital market reaction to major restructuring announcements3. Evaluate the likely impact of M&A transactions on share prices4. Analyze the sources of gains in a Leveraged Buyout (LBO)5. Understand the governance framework of the modern firm and the conflicting in-

terests of different stakeholders in restructuring situations6. Learn how to create value by restructuring bankrupt corporations

Grading

Your grade in the course will be based on the following components:

Individual Valuation Assignment 20% (due before the 3rd class session)Final exam 80%

All other assignments except the Individual Valuation Assignment will not be graded andyou do not need to hand in a written solution. However, I expect that you will work on allassignments with due diligence.

Due Dates

Please turn in your assignment by email to my assistant Nora Bock by email, including apdf or word document and an Excel spreadsheet. State your name and matriculationnumber on the first page of the assignment. Assignments sent after the due date will notbe recognized.

The Individual Valuation Assignment is due on April 29 at midnight.


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Individual Valuation Assignment

During the first two class sessions, you will learn how to value firms for M&A purposes.For the individual valuation assignment, you will have to value one publicly traded firmwith various methods that we will discuss in class. Details will be communicated in class.

Your analysis is restricted to 4 pages (1.5 spacing) of text plus an appendix that containsyour spreadsheet calculations. Make sure that your text is self contained and encom-passes all important information in a transparent manner. Please make sure that thespreadsheet is transparent and easy to understand for a reader.

You are not allowed to collaborate with other students on the specific details of your in-dividual assignment. We reserve the right to use plagiarism software in order to detectplagiarism among students. However, you are welcome to discuss general case relatedquestions with other students. (I.e. where do search for a particular piece of informa-tion..? or How can I use Excel to calculate a specific formula ? etc.)

Readings

All required readings will be put on the learning platform OLAT (Link to OLAT:https://olat.server.uni-frankfurt.de/olat/dmz/ Please log in with your HRZ user name andpassword. For downloading the documents you have to register for the course viaOLAT.). They include a number of articles as well as selected chapters from the text-book "Takeovers, Restructuring, and Corporate Governance", by Weston, Mitchell, andMulherin as well as some academic and/or legal papers and articles.

If you look for an additional reference for the valuation aspects of the course, a good

bookwould be Valuation: Measuring and Managing the Value of Companies, Third Edi-tion, by Copeland, Koller and Murrin, J ohn Wiley & Sons, 2000. Brealey and Myerstextbook Principles of Corporate Finance will also be useful. You will find a lot of helpfulmaterial on valuation of corporations on the much appreciated website of Aswath Da-modaran. (http://pages.stern.nyu.edu/~adamodar/New_Home_Page/sitemap.htm).

Instructors

This course is taught by Mark Wahrenburg, J an Weidner and invited guest speakers tobe announced in class. Nora Bock is the teaching assistant. She will organize the valua-tion assignment and delivers exercise sessions in class.

Mark Wahrenburg is chaired professor of banking and finance of Frankfurt University.He received a masters degree in business administration (Diplom) and a PhD from theUniversity of Cologne. Professor Wahrenburg has been visiting professor at the WhartonSchool and served as a full professor of finance at the University of Witten/Herdecke.For several years, he worked as a consultant with McKinsey and American ManagementSystems.
https://olat.server.uni-frankfurt.de/olat/dmz/https://olat.server.uni-frankfurt.de/olat/dmz/https://olat.server.uni-frankfurt.de/olat/dmz/


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J an Weidner graduated from Goethe University and has an almost lifelong experience inthe M&A industry. He is Senior Managing Director at the Blackstone Group Germany.For many years he headed Morgan Stanley's M&A team for Germany and Austria.

Mark WahrenburgContact Information:

Office: House of Finance, Room 2.55Phone: +49 (69) 798 33 700 (Mrs Hofmann) / 715Email:[email protected]

Nora BockTeaching assistant

[email protected]: +49 (69) 798-33 717Office: House of Finance, Room 2.60
mailto:[email protected]:[email protected]:[email protected]:[email protected]

syllabus ma ss+2013

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