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In 2015, Yıldiz Holding, one of the world's largest producer of confections, biscuits and crackers, was at the end of its divesture process from Ak Gida, one of the leading dairy companies in Turkey. The company had adopted a dual track process, pursuing an initial public offering (IPO) process as well as attempting, in parallel, a strategic sale to create a competitive bidding process. Ak Gida was co-founded in 1996 by the Ulker and Topbas families as a result of a joint vertical integration strategy: Ulker family, owners of Yildiz Holding, would secure milk powder, one of the main raw materials for its biscuits and chocolate production, and Topbas family would be able to create its own private label dairy products for its nation-wide hard-discount chain BIM. Following Yildiz Holding's acquisition of United Biscuits for over $3 billion in 2014, the Holding's CFO Cem Karakas and its Chief Strategy and Growth Officer Nurtaç Ziyal Afridi, were tasked with divesting of its vertical assets including Ak Gida. The duo had prepared Ak Gida for an IPO in Istanbul, while also having negotiated with multiple parties for its sale. Now, the duo needed to make a final decision: should they go forward with the listing, or should they sell Ak Gida to the world's largest dairy company, Groupe Lactalis?

A team of investors at Omidyar Network explore two different investment possibilities in the budding financial inclusion space, using their investment framework to consider capital alternatives available for both investments, each of which carries highly divergent financial and impact potential.

Rafi, a retiring oncologist, wanted to invest in safe, high dividend paying stocks. Upon his stockbroker's recommendation, he bought three tranches of S$500,000 worth of Sabana REIT ("Sabana") even as price fell during the period in between. His stockbroker had advised him to adopt dollar cost averaging, as even if price fell, Rafi could lower his breakeven price and gain in the longer term as stock prices tend to mean-revert. Further, Sabana's high dividend yield would help offset the price fall. Six months later, Sabana's price fell further. Rafi sought the advice of Michael, an investment-savvy friend, who advised him to look at capital gain yield besides dividend yield, and to check out Sabana's website and various investment forums for important company's actions and other crucial information. Rafi found that disgruntled investors, unhappy with Sabana's falling dividend and price, had formed two groups, one of whom had proposed various drastic actions at an Extraordinary General Meeting which may involve booting the REIT manager, and/or delisting the REIT and liquidating its portfolio. The manager formed a Strategic Review Committee and requested for more time. Rafi had to decide: vote for or against the manager or just cut loss immediately.

Greg Milani, Senior Managing Director of the Stanford Management Company, considers how much of Stanford's $27 billion endowment to allocate to early stage capital, taking into account the various pro's and con's of that allocation.

It is 2014 and Environmental Technologies Fund (ETF) Partners, a U.K.-based venture capital firm, has an opportunity to invest in a privately-held U.K. company that manufactured engineered composition leather extracted from waste leather using an environmentally-friendly process. The end product looked, smelled and felt like natural leather. Scalable marketplace adoption of E-Leather's products looked promising, but was just that-promising. And the company's success would largely depend on management's ability to significantly improve the efficiency of its manufacturing operations. ETF needed to decide to invest in the company and, if so, at what valuation. In addition, ETF needed to decide the structure of the investment and how the firm would assess E-Leather's environmental impact.

In early 2017, HCA Holdings, an investor-owned hospital management company, faced a strategically important capital allocation decision. After the exit of its private equity sponsors in 2016, HCA had to determine how best to allocate its substantial annual free cash flows among several competing alternatives. Equity analysts and some mutual fund investors were clamoring for the company to initiate regular quarterly dividends, while some other hedge fund investors were eager to see more share repurchases. Other choices being advocated by various parties included reducing leverage to improve HCA's credit rating to investment grade, spurring growth by initiating a major acquisition program or reinvesting heavily in existing markets to enhance HCA's strong competitive position. These choices had to be made in the face of uncertainty about the future of healthcare regulation and tax policy following the 2016 U.S. presidential election, and in the context of its closest publicly traded peers struggling with heavy debt burdens. HCA's capital allocation choices would be crucial to its ability to provide high quality health care to patients, implement its corporate strategy and deliver value to shareholders.

Kossan is a publicly listed company in Malaysia that produces rubber gloves for industrial, medical and household uses. The industry is oligopolistic and the products are basically homogenous. Thus far, its competitive strategy has relied on low cost, low profit margin, and high volume production. This cost-based competitive industry, as a whole, has been growing at 6-8% per annum and the industry prospect seems promising. In February 2016, the issues facing the company were about its expansion plan and future competitive strategy. Kossan's top management needed to address these concerns: -Should Kossan invest in the expansion plan, amidst similar expansion by its competitors and therefore, potential over-supply scenario in the market? -What should be the product mix of Kossan, given the changes in market demand and competitors' production? -Given the homogenous products and possible expansion by competitors, what were possible strategic options for Kossan to consider to prepare itself for a potential over-supply? -Given that the US market is one of its largest markets, the company also worried about the rising Trump's protectionist sentiment, although it was not certain if and by how much the rubber gloves industry would be affected.

This note discusses how to analyze a bank from the point of view of an equity analyst or investor. The note begins by reviewing the evolution of North American banks from narrow to diversified financial institutions and then describes the financial ratios used to evaluate a bank's operating and financial performance. The final section provides examples of these ratios applied to a North American bank, and a set of Canadian and U.S. banks.

In December 2017, Jacobs Douwe Egberts (JDE, a Dutch coffee company) made an offer to acquire OldTown Berhad (OTB), a Malaysian coffee company. Three large shareholders, representing more than half of the outstanding shares, have agreed to tender their shares and analysts who follow OTB are recommending that investors accept the offer. The remaining shareholders must decide if the acquisition offer is reasonable and whether to tender their shares or not.

A new analyst has been asked to forecast the upcoming dividends for Singapore Airlines Limited. However, unlike most dividend-paying firms, which typically maintain stable, transparent, and simple dividend policies, Singapore Airlines maintained an opaque, complex, and irregular pattern of dividends. Further, the company did not respond to requests for information about expected dividends or the company's dividend policy. The analyst decided to gather historical data about the company and its competitors to gain insights on Singapore Airlines’ dividend policy and to forecast its upcoming dividend.

Profit-making corporations returned cash to investors through dividends or share repurchases. Market participants referred to the fraction of the profits paid to shareholders in the form of dividends as the "payout ratio." However, a large number of firms have never paid a dividend. For instance, over the past decade, more than half of the listed firms in the United States neither paid a dividend nor repurchased shares. For example, only 20 per cent of firms on the Singapore Stock Exchange consistently paid dividends over the past decade, with similar proportions observed in both US and European stock markets. The percentage of dividend-paying firms plummeted to a record low of 17 per cent in 2000. In fact, most of the "new economy" firms such as Amazon, Facebook, and Google, reinvested their entire savings. This note describes rational dividend theories, behavioural dividend theories, and outlines the four categories of dividend strategies followed by firms.

It is difficult to find evidence that Canada’s finance sector is serious about keeping up with the fintech revolution happening in other parts of the world. Of particular concern is the fact that Canada is falling behind in robo-advice solutions. A major reason for this is a fear of a killing off of industry jobs. But in reality, the future of the advice sector won’t be dominated by robots. It will be a hybrid market in which human advisors use digital techniques to gather data and generate recommendations faster and more objectively than they do today. The conclusion that financial advisors are moving to a “behavioural-based” world was laid out in Financial Advice in Canada: A Way Forward, an Ivey paper written with Ivey’s Scotiabank Digital Banking Lab. With the industry about to change, the following five things need to happen: 1) finance education needs to include more behavioural (and not just technical) skills; 2) regulators need to change their licensing and proficiency requirements to include more skills in interpreting and explaining numbers; 3) firms need to add to their hiring criteria a new component that demonstrates a candidate’s capacity to learn and deliver behavioural-based insights; 4) existing advisors need to go back to school to be as up to date as new recruits; and 5) product providers (e.g., fund companies) will need to nudge their value propositions.

Charles Brindamour is the CEO of Intact Financial Corporation, an insurance firm that makes profits purely from selling insurance—unlike most insurance firms, which rely on investing insurance premiums to make profits. In this Ivey Business Journal interview, he explains how for the last five years, Intact has been focused on three trends: changing customer expectations, software, and data explosion and democratization. Besides technology, the most important change in the industry has been customers’ expectations of their suppliers, which have been amplified by social media. Software has changed how people access information and share expertise and experience. Other changes affecting the industry are resulting from increased data generation and climate change. In Brindamour’s view, disruption and preparing for disruption constitute a continuum. The first step is dealing with the basics of disruption that can occur. The second step in the continuum is to invest in enabling technology and skills. The third step is to invest in innovation. The fourth stage is “research and venture.” Brindamour says that a gap in business school learning is the process of learning not just as an individual or leader, but as an organization. Disruptors, he claims, are not software geniuses; they are the ones who see the gap between what is and what is expected and provide strong design ideas.

Exploring Blue Harbour Group's investment in Babcock & Wilcox and its transformation into BWX Technologies.

Follow-up case detailing the changes at BWX Technologies after hedge fund Blue Harbour Group's investment.

London-based activist hedge fund PrimeStone Capital identifies a potential investment in Swiss security company Kaba. PrimeStone believes that the company is undervalued because it has been pushing back various financial targets, and thinks it can help by proposing a new, incentivized executive compensation plan. The company's performance improves, and PrimeStone needs to decide whether its presence can continue to add value or if it should exit the investment.

Murphy Stores is a field case involving a major retailer deciding whether to allocate $7 million of its remaining (and limited) capital budget to either an investment in RFID technology to reduce merchandise theft from stores, or to invest in new energy-efficient store lighting to reduce operating costs and be better for the environment, or some combination of the two. The two alternative investments focus on making financial improvements in two different aspects of Murphy Stores' operations: decreasing "shrink" due to theft and saving on electricity costs. The case offers the opportunity to learn about retail industry operations as well as to make multiple full NPV discounted cash flow analyses. This case offers the opportunity to discuss trade-offs between selecting lower-risk capital projects and higher risk projects with higher expected returns but more variability in potential outcomes. The case illustrates the importance of sensitivity and scenario analysis in project evaluation.