CHRISTIAN SCHOPPER

20 Merchant Court, 61 Wapping Wall

London E1W 3SJ, U.K.
+44 (0)7768 854 655

christian.schopper@aon.at

Eipeldauerstr. 38 / 22 Top 8
1220 Vienna, Austria
+43 (0)664 440 0154

CASES IN STRATEGIC FINANCE

Course Description Executive Summary
Content
The aim of our sessions is to review and discuss your proposals in regards to several case studies in an international
Corporate Finance context.
Learning Approach
As needed, theory / concepts / techniques will be reviewed in the course of the sessions: However focus will be on your
presentations, in-depth financial analysis and proposals of strategic decisions in respect to various case studies. Hence, you
will need to come to class very well-prepared to present and defend your conclusions and decisions in each case situation:
1.

14 April - ACCESSING THE CAPITAL MARKETS: You will be required to hand in a 5-page written analysis (text version)
of the Case Study: Veuve Clicquot, answering among others the following questions / focussing on the following
themes:
a. You are the manager of an equity fund and consider upon whether or not to invest in Veuve Clicquot (VC)
and if so at which price. For this purpose you run a full operational and financial analysis whereby you will
compare VC with its competitors. Also any valuation of VC shares will be cross-checked with the valuations of
the respective competitors. Your views will be deemed for the investment committee focusing on why or
why not you will invest and why or why not - the intended investment will be a success
b. In the context you focus on among others - the following:
i. Provide a full analysis about VC and its competitors (Cash Flow; Working Capital Analysis; Margin Analysis;
Growth Dynamics; Return Dynamics on the basis of a decomposition (!) of: RoE; RoA; RoI; etc.)
ii. Present a company (and hence share price) valuation of VC based on the share price of comparable
companies, whereby you lay references to as many possible parameters as possible. - What will the most
likely share price be? And, would you invest at that price?
iii. How will you make money as an investor? What return would you expect to achieve?

2.

28 April - MERGERS & ACQUISITIONS: You are required to hand in a 5-page summary paper (text version) of the Case
Study: MRC, focusing on the following: You are Mr Brintons advisor and prepare for him a presentation assessing
among others the following themes:
a. Would you advise to go ahead with the proposed acquisition: yes or no and why? (Among others, assume
for your analysis following macro-economic parameters for 1960: US inflation rate: 1.5%; US Treasury Bill
Yield: 2.7%; US Long Term Government Bond Yield: 4.1%)
b. If yes:
i. What is the strategic and financial logic of the transaction?
ii. What maximum price would you pay? (For this purpose come up with a simple forecast of key financial
parameters and a Discounted Cash Flow analysis)
iii. How would you finance the acquisition? In which structure? On what terms?
iv. How would you integrate the acquired target? What operational and / or financial synergies would you
expect to gain over time? How much are latter worth?
v. Any structural thoughts, terms, conditions in regards to the acquisition?
c. If no:
i. Why does the potential transaction make no strategic sense?
ii. Why does the potential transaction not meet financial thresholds? (For this purpose come up with a
simple forecast of key financial parameters and a Discounted Cash Flow analysis)
iii. What are the (better) strategic and financial alternatives without going ahead with the potential
transaction? How would each of them impact the financial performance of the company?
iv. How would you advise to pursue MRCs further strategy?

3.

12 May - RESTRUCTURING: You will be required to hand in a 5-page summary paper (text version) of the Case Study:
Coleco, answering the following: You are Mr Meyer and seek alternatives to re-structure Colecos balance sheet
whereby minimising shareholder dilution:

a. Provide a full financial analysis about Coleco including among others: Cash Flow; Working Capital; Margins;
Growth Dynamics; Return Dynamics. Basis of your analysis is also a decomposition (!) of:
i. Return on Equity (break down RoE in at least 4 core drivers and explain the trends)
ii. Return on Assets (break down RoA in at least 3 core drivers and explain the trends)
iii. Return on Investment (break down RoI in at least 3 core drivers and explain the trends)
iv. Explain what are the reasons for the trends you observe (whats the story behind the financial figures ...)
b. What financing and restructuring options are available? What would you propose?
i. What can you offer to your creditors, bondholders and shareholders considering the financial
performance and the asset base of Coleco? Structure a package which will ensure that the company has
a solid financial basis again
ii. What will be the creditors and bond holders position after your proposed financial restructuring? How
would you expect them to react to your proposal?
iii. What impact will your proposal have on balance sheet and income statement (Draft an income statement
and balance sheet on the basis of 1987 including your proposal)?
iv. How would you implement your proposal considering the market environment at that time?
4.

26 May ACCESSING THE CAPITAL MARKETS: You will be required to hand in a 5-page written analysis (text format) of
the Case Study: Nixdorf, answering among others the following questions / focussing on the following themes:
a. You are Sven Kado and decide upon the optimal funding strategy going forward for Nixdorf so that the
growth dynamics of the Company is optimally supported. - For this purpose you run a full operational and
financial analysis whereby you will thoroughly analyse the various capital markets segments (bank loans,
bonds, equity) and the mood as well as capacity to absorb Nixdorf issues.
b. In the context of this presentation, you focus among others - the following:
i. Provide a full financial analysis (Cash Flow; Working Capital Analysis; Margin Analysis; Growth Dynamics;
Return Dynamics on the basis of a decomposition (!) of: RoE; RoA; RoI; etc.)
ii. Present a company (and hence share price) valuation of VC based on the share price of comparable
companies, whereby you lay references to as many possible parameters as possible. - What will the most
likely share price be? And, would you invest at that price?
iii. How will you make money as an investor? What return would you expect to achieve?
c. What financing and options are available? What would you propose?
i. Structure a proposal which will ensure that the company can continue to grow aggressively going forward
ii. What will be the position of: Mr Nixdorf, employee shareholders, banks after your proposal has been
implemented? How would you expect them to react to your proposal?
iii. What impact will your proposal have on balance sheet and income statement?
iv. How would you ensure that the capital markets can absorb and digest your proposal?

5.

FURTHER CASES YET TO BE ANNOUNCED

Preparation and Grading

Participation is mandatory
Your respective Paper Summaries and must be sent to me latest 2 (TWO) DAYS BEFORE class starts via Opolis
Secure Mail (please open a free account via www.opolis.eu)
Also all other correspondence between you and me for any questions in regards to the course or the case
studies, as there may be - will be via Opolis Secure Mail only
You are encouraged to team up in pairs (i.e. 2 individuals not more!) to prepare the respective presentations.
But, having said this, you have to work on every assignment together: Hence, just splitting up the cases as such
between individuals is not acceptable
Grading will depend on the quality of hand-ins (50%) and your individual participation in classroom (50%). Short
tests may take place at the beginning of each session covering the previous session
The course and all correspondence will be in English
NOTE: The course is intense and will require substantial amount of individual preparation. As for some of you the
technique of case studies may be new, just ensure that each of your argument is based on the text and / or the
appendices of the respective case study. (Later in class, if you make a statement, always be prepared to let us
know where you have your facts from ...)

Literature
There is a vast amount of excellent literature on capital markets available. I propose that you choose articles and books you
feel comfortable with. As a preparation for the course I would suggest that you should become familiar with capital market
products, basic valuation techniques and income statement / balance sheet structures. Good references are among
others:
Damodoran, Aswath: Corporate Finance; Investment Valuation

Brealey, Richard Myers, Stewart: Principles of Corporate Finance; Fundamentals of Corporate Finance
Koller, Tim et al: Valuation
Ross, Steven Westerfield, Randolph et al: Corporate Finance
Pettite, Justin: Strategic Corporate Finance