A wrap-up of 2007 mergers and acquisitions (M&A) activity discovers that the M&A volume reached new records throughout the year but rapidly declined after the subprime-lending crisis made credit markets tighter. During the next years, Investment Banks expect less mega-deals with the participation of financial sponsors. The share of financial investors in the total M&A volume has sunk from 36% in May to 14% in October 2007 (Köhler, 2007). The same holds true for private equity companies that are struggling to raise new debt capital for their investments (“Vergleich mit J.C. Flowers,” 2008). Nevertheless, suggestions that the M&A boom has reached its climax and is about to come down may be premature. Especially for Germany, financial analysts expect a special economic cycle, as the M&A activity of public banks is expected to remain on the move. In general, the future trend is ambiguous; on the one hand, the credit crunch that already affected vast parts of global markets could also damage M&A activity. On the other hand, due to this crisis, new opportunities for large mergers and acquisitions may arise. According to Thomson Financial, the M&A volume for 2007 amounted to €3.0 bn due to record investments in the first half of 2007, compared to €2.5 bn in 2006 and €1.9 bn in 2005 (Köhler, 2007). Even more significant is the astonishing amount of high priced energy deals. Companies in the energy sector, having stable cash flows, will remain attractive targets. The energy sector, being one of the largest concerns of the global economy, is facing several simultaneous developments: with oil prices soaring, unrest in the Middle East and Russia exerting political pressure with its natural gas resources, the importance of M&A among energy companies is likely to increase in 2008. Especially government sponsored privatisation and market liberalisation programmes have provided the opportunity for investments in what were once state-owned monopolies (Deloitte, 2006)...
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Problem Definition and Objective
- Course of Investigation
- M&A and Bidder Competitions- Foundations
- Theoretical Course of M&A Transactions
- A Game-Theoretical and Economic Approach to Bidder Competitions
- Bidder Competitions Viewed as an Auction
- The Winner's Curse
- The Free-Rider Problem
- Defensive Actions
- Economics of Takeover Regulation
- M&A in the Energy Sector - A Market Overview
- Company Profiles
- Techem and its Business Model
- German Strategy and Outlook
- Worldwide Strategy and Outlook
- Macquarie and MEIF II Energie Beteiligungen GmbH & Co.KG
- BC Partners and Heat Beteiligungs III GmbH
- Techem and its Business Model
- Transaction and Business Environment
- The Bidder Competition
- The First Phase – First Bid
- The Second Phase - Competitive and Common Bid
- The Third Phase - Shareholder Structure Problems
- The Fourth Phase - Last Bid by Macquarie
- Strategic Considerations of the Bidders
- Macquarie
- BC Partners
- The Bidder Competition
- Financial Analysis
- Empirical Analysis of Share Price Performance
- Reaction of Share Price on Different Bids
- Benchmark Analysis
- Envisaged Financing Structure and its Feasibility
- Macquarie
- BC Partners
- Independent Valuation
- Trading Multiple Analysis
- DCF Valuation
- Empirical Analysis of Share Price Performance
- Critical Analysis and Interpretation
- The Distinctiveness of the Techem Case
- Bidders' Strategies
- Evaluation of Different Bids
- Share Price Reactions
- Bid Adequacy According to Own Valuation
- Management Behaviour during the Bidder Competition
- Outlook and Conclusion
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This thesis aims to provide a detailed analysis of the bidder competition for Techem, a German company specializing in energy metering and management. The analysis focuses on understanding the strategic considerations of the bidders, evaluating the financial implications of different bids, and examining the overall dynamics of the competition.
- M&A transactions and bidder competitions in a game-theoretical and economic framework
- The strategic and financial considerations of bidders in the Techem case, including Macquarie and BC Partners
- Empirical analysis of share price performance and its correlation with the bidding process
- Evaluation of different bids based on financial analysis, valuation methods, and the perspectives of the bidders
- The overall management behavior and its impact on the course of the bidder competition
Zusammenfassung der Kapitel (Chapter Summaries)
The thesis begins by introducing the problem and objective of the study, outlining the course of investigation. Chapter 2 delves into the foundations of M&A and bidder competitions, exploring theoretical concepts such as game theory, auction dynamics, the winner's curse, and the free-rider problem. This chapter also provides an overview of M&A activities in the energy sector.
Chapter 3 presents detailed profiles of the companies involved in the Techem competition, specifically focusing on Techem's business model, strategies, and key players, along with profiles of Macquarie and BC Partners. Chapter 4 examines the transaction and business environment surrounding the bidder competition, outlining the different phases of the bidding process and the strategic considerations of each bidder.
Chapter 5 delves into a comprehensive financial analysis, including an empirical assessment of share price performance in response to different bids, a thorough analysis of the envisaged financing structures for both bidders, and an independent valuation using trading multiples and discounted cash flow (DCF) methods.
Chapter 6 provides a critical analysis and interpretation of the Techem case, focusing on the distinctiveness of the case, the strategies employed by the bidders, an evaluation of different bids, and an examination of management behavior during the competition.
Schlüsselwörter (Keywords)
The key themes and concepts explored in this thesis include M&A, bidder competitions, game theory, auction dynamics, the winner's curse, the free-rider problem, financial analysis, valuation methods, strategic considerations, share price performance, and management behavior.
- Quote paper
- Ekaterina Bozoukova (Author), 2008, The Bidder Competition for Techem, Munich, GRIN Verlag, https://www.grin.com/document/91510
