Is mylan overpaying for king

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Reference no: EM132426459

FIN380 - Cases in Financial Decision-Making

Case Study: Mylan Laboratories' Proposed Merger with King Pharmaceutical

Suggested Assignment Questions:

Question 1. Is the merger between Mylan and King a "good deal?" If so, for whom?

Question 2. What does the market's immediate reaction to the merger proposal indicate about the deal?

Question 3. Does the deal create any value overall? How are the gains from the deal-if any- distributed?

Question 4. What are the synergies between Mylan and King? Who is gaining from these synergies? What are the risks to the synergies?

Question 5. Is Mylan overpaying for King? If Mylan is willing to offer stock to buy King what does that suggest about the value of its stock?

Question 6. Why does King's share price settle at less than 0.9 times Mylan's price? How can we infer the probability of the deal going through from the change in market prices over time?

Question 7. What is Carl Icahn's motivation behind opposition to the merger? How Can Perry Capital counter Icahn's influence at Mylan? What are Perry's options and obstacles?

Question 8. How do you reconcile Perry's apparent conflict of interest between holding positions in both Mylan and King shares simultaneously? Is there a moral hazard?

Question 9. Do you approve of Perry's use of derivatives to hedge their risk expo

Reference no: EM132426459

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