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This study will help students determine the economic value of a firm particularly in case of a small business. The crux of the case is to help students estimate an enterprise value for a company and figure the actual worth of the company to aid in decision-making.

This case is about a decision dilemma faced by Shashi Hegde, Director, Hycons Renewable Private Ltd, a company ventured into the production of Bio-CNG. It is about a recent proposal received by the firm from APL Ltd for equity investment with 40% stake in the firm. The case reflects the dilemma faced by small businesses to choose between investment or loss of control. Accepting the proposal will bring in additional funds, whereas the Board loss control on the firm. The case revolves around this dilemma. To help Hegde in this task, he seeks advice from his CFO and his confidant Kumar.

This case is most appropriate for a core finance class for both under-graduate and graduate programs.

Teaching notes are available for educators only.

CSS 1: Accounting and Finance.

The learning outcomes focus on enabling students to view operational model changes critically, as they pertain to:

■ evaluating different management styles and uses of the ADKAR change management model in decision-making moments in times of crisis (such as COVID-19) in non-profit organisations (NPOs);

■ evaluating different ways in which NPOs pivot to sustainability, including the use of social enterprise models and change management;

■ anticipating and managing change in institutional formations through new technologies;

■ articulating trade-offs between grant and non-grant resource mobilisation for African philanthropy; and

■ application of change management theory to organisations’ sustainability journeys.

In May 2020, working from her home office just over one month into a nationwide lockdown because of the COVID-19 pandemic, Masego Madzwamuse, chief executive officer (CEO) of the Southern Africa Trust (the Trust), knew that it could once again be at a crossroads. In 2015, the Trust had found itself in a quandary when its primary donor gave notification of its intention to withdraw its funding. The Trust had responded by making changes to its structure and strategy. Now, with uncertainty rife throughout South Africa, the CEO knew that she had to consider whether the changes that had been implemented over the past five years had prepared the Trust not only to respond to, but also to survive the pandemic and continue its vital work long into the future.

Postgraduate Diploma in Management, MBA, Masters in Management.

Teaching notes are available for educators only.

CSS 11: Strategy.

This case describes the evolution of an entrepreneur's venture-capital fund-raising from seed-stage financing through later-round efforts. The case focuses on where the “action” is in venture finance: the exploitation of social capital by an entrepreneur and investors. Much of the teaching materials on venture finance focus on the economics of financing; while these materials provide useful information about the mechanics of valuation and how to structure venture-capital agreements, they miss the social side of venture-capital investing. The case illustrates the theoretical concept that social capital (i.e., a person's relationship to other people in society) influences venture finance. The case can be used in a class on entrepreneurship or venture finance.

The case is about the selecting the agency to take up the brand building challenge of SRF Limited, a well established, large business in India having diverse lines of “industrial products”. The business decision problem of SRF stemmed from the fact that the corporate leadership team, which had to take a decision on the topic had considerable reservation about the appropriateness of each of short–listed agencies for the job at hand. There were also differences of opinion on what would be the criteria for selecting the brand consultant. The Managing Director had to ensure that the team arrived at a consensus, rather than being foisted with a decision from top.

This case can be taken up in executive education programs as well as the basic marketing management program at the postgraduate level or in a specialist advertising courses. The case can be taught in the core marketing course at the postgraduate level while discussing the selection on advertising agency.

The decision–making focus of the case is about selecting an advertising agency among a set of three, which was most suited to help SRF achieve the repositioning, branding and the awareness creation challenge. The agencies, however, were mostly experienced in building brands for consumer product which was distinct from industrial intermediaries company like SRF. As an organization, SRF had no experience of dealing with an advertising agency, thus the selection was quite a challenge. It brings to focus the decision–making dilemma faced by a large number of companies in emerging markets which are making the transition to brand building.

The following insights could be elucidated by the case:

Help the students understand the corporate branding concept as distinct from product branding. Decision–making dilemmas associated with corporate brand building for a company with long legacy of product branding. Criteria for evaluating the proposals by advertising agency from the perspective of a client organization.

Teaching notes.

This case provides a vehicle for discussing analytical approaches to understanding bidding strategies in a hostile tender offer setting. In 1997, Hilton Hotels Corporation offered to acquire ITT Corporation in an unsolicited tender offer. ITT resisted in several ways. At the date of the case (July 17, 1997), ITT announces a restructuring of the firm aimed at delivering about $70 a share to its shareholders. The task for the student is to understand why Hilton's takeover attempt has failed thus far, and what the possible responses might be at this stage. The case contains a completed valuation analysis of ITT (prepared by the casewriter), which suggests that ITT is worth, at most, $89 a share to Hilton. In preparing a possibly higher bid for the firm, the student must weigh the probability of another bidder's entering the fray and that competitor's bid price. The instructor can use this setting to compare the target shareholders' outlook with the classic “prisoner's dilemma” and to discuss the expected value of not tendering—both concepts are important in devising a bidding response.

The learning outcomes of this study are as follows:1. Learn to analyze a hostile takeover bid from the perspectives of the acquirer, target firm’s management and a large institutional investor in the target firm.2. Review the structuring, financing, valuation, mode of consideration, legal and regulatory aspects of a hostile takeover.3. Understand the role of the target firm’s board in a hostile takeover transaction.4. Address “to sell or not to sell” dilemma of a large institutional investor in the target firm in the event of a tender offer given financial and non-financial considerations.

On June 14, 2019, Pulak Prasad, Founder and Chief Executive Officer (CEO) at Nalanda Capital, in consultation with other managing partners at Nalanda Capital, had to decide whether to tender a 10.6% equity holding in Mindtree Ltd. in an unsolicited open offer made by Larsen and Toubro (L&T) Ltd. Until then, Nalanda Capital, led by Prasad, had aligned with the Mindtree founders and had led a campaign to thwart L&T’s bid to acquire Mindtree; L&T’s offer to acquire 31% of Mindtree shares was because of open on June 17, 2019 and it is time for Prasad and the management team to take a reasoned call – whether to stay in Mindtree or to exit? Associated aspects included – What could be the consequences of not selling the stake? What could be L&T’s game plan? Could Mindtree continue to create wealth for its shareholders under L&T?

This case is appropriate for Mergers & Acquisitions and Strategic Financial Management courses in modules focused on structuring, financing and takeover defence techniques in a hostile takeover transaction. The case is appropriate for graduate MBA and EMBA programmes.

Teaching notes are available for educators only.

CSS 1: Accounting and Finance.

Atari, a maker of video games, went through several owners over the years winding up controlled by Infogrames, a French publisher of video games. Infogrames later sold Atari shares in a secondary public offering, eventually reducing the parent’s share to 51.6 percent by September 2005 creating a complicated two-tier ownership structure. Two levels of management made it difficult to get things done. The financial structure was a problem for Infogrames because the French company had to consolidate 100 percent of Atari’s results even though it only owned 51 percent of the company. Atari was generating substantial losses, had defaulted on its debt, and was faced with the possibility of filing for bankruptcy without more working capital. The independent directors of Atari, when confronted with an unsolicited Infogrames buyout offer, had several options: (1) agree to the $1.68 offer (take the money and run); (2) pursue a white knight (a buyout from another investor of company that would be willing to pay a higher price and invest working capital); (3) file a lawsuit to stop the takeover to buy time or perhaps force Infogrames to increase its offer.

Communications in a turnaround How planning and executing a communications strategy is as important as other functional actions Dealing with an international ownership base with a U.S. turnaround of a legacy brand with no hard assets Fiduciary duty and governance issues arising from a takeover offer.

In December 2001, after a six-month process of vying for AT&T's Broadband, the president of cable operator Comcast Corporation, had just received word that Comcast's $72-billion offer had won the auction. Comcast, the cable industry's third-largest operator, would merge with industry leader AT&T Broadband to form a company with more than $20 billion in revenue and an unparalleled distribution (a presence in 22 of the nation's top 25 markets). Now the presidents of both companies began to consider their post-merger integration strategies. What was important and how should they prioritize their activities? How could they get all stakeholders to understand the rationale for the deal and its business goals and excited about the new AT&T Comcast?

The case explores information technology (IT) company Mindtree’s journey of 20 years from the time it was founded in 1999 to be different from others, and how it became a target for acquisition by an Indian diversified conglomerate in 2019. It offers insights into developing organizational culture and values in an organization, threats faced by a company when promoters dilute their shareholding, and the strategies followed by the acquirer and the target firm. It also deals with the challenges in the acquisition of a knowledge service digital firm. After working through the case and assignment questions, students will be able to: identify the circumstances under which a company can become a target for hostile takeover; describe motivations of the acquirer firm in an acquisition; distinguish between acquisition and hostile takeover, and discuss salient features of Securities and Exchange Board of India (substantial acquisition of shares and takeover) regulations, 2011; list the defenses a target firm can adopt to ward off hostile acquirer; explore strategies followed by acquirer and target firms; analyze important ingredients of organization culture, and importance of cultural congruence in an acquisition; and discuss challenges faced by an acquirer in India, namely, legal, retention of clients and key people in the target firm particularly in hostile environment.

The case explores how ten IT professionals founded mid-tier IT services company Mindtree in 1999 in Bengaluru, India (home to Infosys and Wipro) to be different from others – by inserting themselves at a higher level in the value chain, being philanthropic as a part of broader business strategy to attract a certain kind of employee and customer. It developed a culture of equality, consideration and respect. Its attrition rate of 12 to 13 per cent was significantly lower than the Industries. Mindtree crossed annual revenue of US$1bn for FY 2019 and was growing at twice the industry’s growth rate. The most attractive part was that its proportion of revenue from digital services was about 50 per cent as compared to 25-35 per cent of other services vendors. With time, the share of promoters/founders declined and increased one investor’s shareholding of V. G. Siddhartha and his related entities. In early March 2019, the promoters’ stake was 13.32 per cent while Siddhartha had 20.32 per cent. Larsen and Toubro (L&T) one of India’s conglomerate entered into a share purchase agreement on March 18, 2019 with Siddhartha to acquire his 20.32 per cent stake. Immediately, L&T asked its broker to purchase up to 15 per cent of share capital of Mindtree at a price not exceeding INR 980 per share (each share of face value INR 10). This would trigger an open offer by L&T to purchase additional 31 per cent shares of Mindtree. The action of hostile takeover bid by L&T evoked emotional criticism from Mindtree founders. Mindtree efforts to defend itself could not materialize. L&T’s stake crossed 26 per cent on May 16, 2019. After Indian regulator SEBI’s approval, L&T’s open offer to buy shares from Mindtree shareholders commenced on June 17, 2019. The case examines motivation of the acquirer firm particularly when it is a conglomerate, and how a well-performing company became a target for hostile takeover. It looks at vulnerabilities of a target firm, and defensive steps a firm can take to fence itself against such takeover. The case also explores how organizational culture is built in a people-oriented business, namely, digital services, and what role it plays in a merger of two firms.

The case is suited for postgraduate students of management, as well as those undergoing executive courses in management.

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 11: Strategy.

Middleby Corporation was a designer and manufacturer of commercial food processing and food service equipment for fast food as well as high-end restaurants. During the latter half of the 1990s, Middleby became increasingly unfocused as its number of product lines increased dramatically. Margins and sales slipped. At the same time, some of the company's high-profile product development initiatives ended in failure. Although Middleby's top management recognized some of these apparent warning signs, rather than take action, they seemed eager to blame the disappointing results solely on the company's overseas operations. This inaction caused Middleby's financial performance to deteriorate further, resulting in violations of its loan covenants. To finally correct the situation, Selim Bassoul was moved from his role as general manager of Middleby's Southbend plant up to chief operating officer for the entire corporation. Bassoul had taken the underperforming Southbend plant and turned it into a star performer, correcting and improving customer service, operations, and finances and establishing a clear strategic direction. Bassoul had to craft a turnaround plan for the entire company in the areas of strategy, operations, and finance. He cut the number of products substantially, fired some key customers after a customer profitability analysis, and focused product development on innovative products that saved Middleby's customers time and money. Following these changes and others, the company returned to profitability and Bassoul was named CEO. Bassoul then decided to present a major acquisition opportunity to the board of directors.

1. Successful turnarounds require three essential elements to be addressed: strategy, finance, and operations, all under the CEO's leadership. Students will learn how each element alone and in combination work to make a successful turnaround. 2. Students will learn turnaround leadership skills and see their parallel as entrepreneurial leadership skills. 3. Students will learn that decisions on products, customers, and employee motivation all affect a turnaround strategy.