個案資料

The chief executive officer of Amtelecom Group Inc. must make a recommendation to the board of directors regarding the best way to sell its Amtelecom Communications subsidiary. AGI owns and operates ICS Courier, a national fixed-route courier business and Amtelecom Communications, a regional telecommunications, cable television and Internet business. Amtelecom Communication's capital requirements are not being satisfied because cash is being diverted to ICS Courier to cover its losses. As well, AGI's stock has been performing poorly. In order to alleviate these problems, the board has decided to sell off Amtelecom Communications. The three sales alternatives being considered are: selling to a strategic buyer, IPO via a common share offering and IPO via an income trust offering. This case can be used to teach students about valuation in a strategic setting, and provides an opportunity to apply sum of parts valuation to value a diversified firm, apply discounted cash flow, conduct a transactions analysis to determine the standalone value of a firms, and gain a basic understanding of income trusts.

This case can be used in introductory and intermediate finance courses to teach students about valuation in a strategic setting. Students should be familiar with the cost of capital and time value of money before studying the case. Specifically, this case provides students with an opportunity to:<ul><li>Apply sum of parts valuation to value a diversified firm</li><li>Apply discounted cash flow, comparable and previous transactions analysis to determine the standalone value of a firm</li><li>Gain a basic understanding of income trusts and how to value a firm based on expected yields</li><li>Consider various alternatives and the effects of capital market trends when selling a business</li><li>Learn about the Canadian telecommunications industry</li></ul>

• Initial Public Offerings
• Valuation
• Mergers & Acquisitions
• Financial Strategy