edf40wrjww2CF_PaperMaster:Desc
Running head: LESTER FINANCIAL BENCHMARKING
Lester Financial Benchmarking
Lester Financial Benchmarking
Euronet and RIA Envia INC – Mergers and Options -
The Lester and Shang-Wa merger is one that will allow both organizations to survive the market from hostile bids and enjoy steady growth. For this merger to take place though Lester needs to raise funds that would appease Shang-Wa. With Lester’s on take of Shang-Wa Lester will experience from the financial forecast a decrease in projected revenues and increase in liabilities (University of Phoenix, 2008). This information does not include though that if Lester were to not purchase Shang-Wa that the organization would pay an increased amount from other vendors for the same services (University of Phoenix, 2008). Even with the on take of the additional cost involved with Shang-Wa, Lester may have more long-term benefit by the merger.
Aside from the funds needed to fund the merger Lester will also need funds to construct a new manufacturing facility. Lester can gather these funds from a few different options including cash and loans. Loans can take the form of bank loans or corporate bonds, which would have warrant and convertible guidelines. Alternatively Lester can also offer a stock-for-stock transaction to Shang-Wa (Ross, Westerfield, & Jaffe, 2005). The volatility of the stock though may deter Shang-Wa from accepting this form. To offset the market fluctuations Lester can offer Shang-Wa contingent value rights. The contingent value rights act similar to a warrant in regards to Lester could offer Shang-Wa a dollar figure in share at the current stock price with a form of insurance stating that Lester would ...