In May 2019, a retail investor in the Philippines had to decide whether or not to immediately sell his shares in Holcim Philippines, Inc (HPI). The San Miguel Corporation had just announced the acquisition of around 86% controlling interest in HPI. The price of HPI had increased considerably in the months leading up to the acquisition announcement, and this investor was anticipating a large gain. Now, he needed to run a fair value estimate of HPI’s price using both the capital asset pricing model (CAPM)-based discounted cash flow method and the comparable multiples method in order to decide what to do: Should he sell his shares at the prevailing market price, wait until the future potential tender offer, or hold his shares indefinitely?
豪瑞收购案: 巩固生力公司在菲律宾的行业领导地位 The Holcim Acquisition: Cementing SMC’s Leadership in the Philippines (Simplified Chinese version)
Maria Theresa Manalac, Yusoph Maute, Sandeep Puri
Product #:W33583
Supplier:Ivey
Discipline:Finance
Setting:Philippines, 2019
Subjects:
Industries:
Geography:
Your Price:$10.54
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Learning Objectives
- 评估菲律宾水泥行业的吸引力。
- 评估收购者和目标公司在拟议收购中的动机。
- 评估目标公司的吸引力。
- 描述收购交易完成前的监管要求。
- 运用贴现现金流估值和资本资产定价模型估算股票的公允价值价格，并将公允价值价格与现行市场价格和收购方的潜在收购价格进行比较。
- 采用可比公司倍数法估计公允价值价格，并将公允价值价格与现行市场价格和收购方的潜在购买价格进行比较。
- 为是否出售股票提出建议。
This case is designed for a graduate-level introductory financial management course to teach corporate valuation in the context of an acquisition. After working through the case and assignment questions, students will be able to do the following:
- Assess the attractiveness of the cement industry in the Philippines.
- Evaluate the motivations of acquirors and target companies in the context of a proposed acquisition.
- Assess the attractiveness of a target company.
- Describe regulatory requirements prior to the completion of an acquisition transaction.
- Estimate the fair value price of a stock by applying the discounted cash flow method and the capital asset pricing model, and compare the fair value price to the prevailing market price and the acquirors’ potential purchase price.
- Use the comparable firm multiples method to estimate fair value price, and compare the fair value price to the prevailing market price and the acquirors’ potential purchase price.
- Make a recommendation about whether or not to sell a stock.