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In 2005, Relational Investors, a registered investment advisor, launched a proxy contest to gain two seats on the board of directors of Sovereign Bancorp. Relational accused Sovereign of operational mismanagement and poor corporate governance, representing a breach in fiduciary responsibility by the company's board of directors. Relational claimed that a board reconstitution was in the best interest of investors. Subsequently, Sovereign entered into a controversial three-way deal with Banco Santander Central Hispano of Spain, which thwarted Relational's efforts by diluting its ownership position and by giving Santander board seats and veto power over the removal of Sovereign's CEO. Discusses the tactics used by Relational Investors to attempt to derail the Santander deal and the tactics used by Sovereign Bancorp to defend it.

This case illustrates a comprehensive valuation of a publicly-traded firm specializing in building and managing prisons. Students must assess the firm's strategy and risks, evaluate key financial reports, derive forecasts of future performance, and use these forecasts to value the firm.

Provides an introduction to the fields of project finance and infrastructure finance, and gives a statistical overview of project-financed investments over the years from 2002 to 2006. Examples of project-financed investments include the $4 billion Chad-Cameroon pipeline, $6 billion Iridium global satellite telecommunications system, $900 million A2 Toll Road in Poland, $1.4 billion Mozal aluminum smelter in Mozambique, and $20 billion Sakhalin II gas field in Russia. Globally, firms financed $328 billion of capital expenditures using project finance in 2006, up from $217 billion in 2001. The use of project finance has grown at a compound rate of 13% over the past 10 years. Focuses primarily on private sector investment in industrial and infrastructure projects, and contains four sections. The first section defines project finance and contrasts it with other well-known financing mechanisms. The second section describes the evolution of project finance from its beginnings in the natural resources industry in the 1970s, to the U.S. power industry in the 1980s, to a much wider range of industry applications and geographic locations in the 1990s, to infrastructure finance in the 2000s. The third section provides a statistical overview of project-financed investment over the last five years (2002 to 2006), and looks at industry, project, and participant specific data. In addition, provides recent data on infrastructure investments and public-private partnerships. The final section discusses current and likely future trends.

Spreadsheet Supplement for case 207107.

The chief of the Waterloo Regional Police Service was again faced with a crisis in the ongoing development of the CIMS project. It was early 2005 and he found himself again debating the future of this increasingly time-consuming and expensive project. Complicating matters now, however, was the fact that several of his partner organizations in CIMS wanted to go live with those portions of the software which had been delivered from the vendor. These organizations had been struggling with antiquated systems, and wanted to push forward with implementing the new system, despite the continuing presence of system problems. What should he do? Should he encourage those regions to wait and rethink the project or was it best to continue moving forward with those elements.

The chief of the Waterloo Regional Police Services (WRPS) found himself preparing for an important board meeting to discuss the fate of the CIMS project. Earlier that year he had recommended that the contract with ITG be canceled and negotiations toward this end were proceeding. Now the chief was faced with the task of recommending an alternative vendor and approach for completing this important project. WRPS needed to install a suitable computer-automated dispatch and record management system - key CIMS components - prior to December 31, 2005 as 2006 was the federally mandated deadline for implementing this functionality within police agencies. The chief knew that WRPS resources would be heavily tasked to meet the December 31, 2005 deadline, even if a vendor was chosen as soon as possible. The chief was well aware that a decision needed to be made regarding the best vendor to manage the next phase of the CIMS project as quickly as possible to allow WRPS and the vendor project team time to implement the required solution. The chief believed that the first step was to select the best vendor and then present the recommended solution to the board.

It had been four years since the chief of the Waterloo Regional Police Services (WRPS) met with the board to discuss critical next steps regarding vendor management for the Common Information Management System (CIMS) project. CIMS was an information systems project originally involving the WRPS and seven other police organizations. Since then, considerably more resources had been invested into the CIMS project by all stakeholders involved. The relationship with the current vendor, ITG, was growing less productive and the chief knew it was time to reassess the project to determine the best next steps toward successful project implementation. It was September 2005 and the chief found himself preparing for an important board meeting to discuss the fate of the CIMS project.

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Supplement to (607-018). Download only.

Describes the actions taken by HP's CEO Mark Hurd in his first two years leading the company.

June 2005 was to bring online gambling out of the shadows and into the spotlight. PartyGaming, a start-up formed in 1997, launched a flotation (Initial Public Offering) on the London Stock Exchange that valued the firm at £4.64 billion giving it a larger market capitalisation than British Airways. PartyGaming had become the dominant player in the booming online poker market with its PartyPoker brand having over 50% market share. However, this float - as with Internet gambling in general - was not without controversy. While PartyGaming had an online gambling license from the tax haven of Gibraltar, nearly 90% of its revenue came from the United States, where the authorities viewed Internet gambling as illegal and threatened legal action. The complex operations of this truly global firm with bases in London, India, Gibraltar and Canada, the background of its founder Ruth Parasol in Internet pornography and the handling of its flotation also raised concerns from an ethical perspective, with some commentators questioning whether the float should have been allowed at all. These concerns were then confirmed as US legislation to curb online gambling was passed in September 2006, leading to PartyGaming's exit from the US market and an immediate fall of 58% in the share price. This case study analyses the entrepreneurs behind PartyGaming, its growth, the challenges it has faced, the ethical issues it poses and its future prospects. The case draws on theory from e-commerce, strategy and ethics.

Supplements the (A) case.

Supplements the (A) case.

Describes the dominant firm in the Korean cosmetics market up to the mid-2000s. Gives background on AmorePacific's historical evolution, its current brands, and the competition it faces from local and international players. Also provides information on the market structure and prominent channels of distribution.

Acumen Fund was founded in 2001 to provide modest amounts of capital, together with business expertise, to help build thriving enterprises that would serve large numbers of poor people. In 2004, Acumen Fund invested in the Series B round of WaterHealth International (WHI), a company that was developing approaches for providing clean water to the poor worldwide. In 2006, WHI planned to launch a major initiative in India. It also planned a new round of fundraising to support the company's continued growth. Provides background information on venture philanthropy, and on Acumen Fund. Also describes the problems associated with safe drinking water in developing countries, and WHI's approach to addressing those problems.

Lone Star Power was a midsize power-generation and power-distribution company. The company's new chief investment officer must evaluate a number of financial-reporting issues raised by an outside analyst. Those issues relate to (1) revenue recognition, (2) consistency of accounting policies, (3) expense timing, (4) classification of reported line items, (5) supplemental interpretive guidance from management, and (6) interim voluntary disclosures. Using a very simple setting, the case blends issues of financial transparency, financial accounting, SEC reporting requirements, and Reg. FD disclosures.