Canadian Pacific's Bid for Norfolk Southern, Spreadsheet Supplement

Name: Canadian Pacific's Bid for Norfolk Southern, Spreadsheet Supplement (English version)
SKU: 216712

Author(s):Esty, Benjamin C.;Mayfield, E. Scott

Product #:216712

Supplier:Harvard Business School

Discipline:Finance

Details:Supporting Material (Spreadsheet) • 62 kB • 2016-04-29

Subjects:

Capital structure Cash flow Corporate strategy Corporate finance Strategy Finance and investing

Industries:

Transportation and distribution

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$9.71

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Spreadsheet supplement for case 216123. In December 2015, Canadian Pacific Railroad (CPR) has just made its third bid to acquire Norfolk Southern Corporation (NSC), one of the largest railroads in the United States. Having rejected the prior offers, NSC's CEO James Squires and the NSC board must now value the current offer including the projected merger synergies as well as a recently-added contingent value right (CVR) designed to sweeten the offer, and decide how to respond.

Learning Objectives

This case provides a comprehensive review of topics covered in both introductory and advanced corporate finance courses-topics such as acquisition bidding strategies, capital structure, DCF valuation, multiples, activist investors, fiduciary duties, option pricing, and payoff diagrams-and does so in a very interesting setting.