Corporate takeovers and insolvency
Mr Lawrence Webb
6 points * 3 hours per week * First, second semester * Caulfield * Prerequisites: ACC2491 and FIN1151
Objectives On completion of this subject, students should be able to recognise the economic benefits and costs of mergers and acquisitions; apply the major value principles of price earnings multiples, discounted cash flow and asset backing; understand the legal requirements of mergers and acquisitions. In respect of insolvencies, students should be able to: understand the law and practice of insolvency; understand causes and avoidance of corporate failure; apply predictive models of corporate failure and appreciate the failure pathway through case study approach.
Synopsis Takeovers - the acquisition and sale process; valuation (I) and (II); legal requirements in respect of mergers and acquisitions; evaluation of targets; insolvencies - social and economic costs of failure; law of insolvency; prediction of the company at risk; causes of failure; avoidance of failure; case studies of corporate failure.
Assessment Case studies: 30% * Class test (3 hours): 70%
Prescribed texts
Lonegan W The valuation of businesses and shares and other equity Longman Cheshire, 1992
Official listing rules Australian Stock Exchange Ltd, 1994
Australian corporation and securities legislation (latest edition)
Tomasic R Australian corporate insolvency law Butterworths, 1993