m.sc. (laurea magistrale) degree program in accounting and

_________________________________________________________________________________________________________________________ Free University of Bozen /Bolzano–Faculty of Economics and Management Syllabus Corporate Restructuring Mergers & Acquisitions

First Semester Academic Year 2020/2021 of 13

Faculty of Economics and Management M.Sc. (Laurea Magistrale) degree program in Accounting and Finance (LM77/D.M. 270) – 2nd Year

Major in Finance and Financial Markets

Corporate Restructuring: Mergers & Acquisitions (RMA #25417)

Syllabus and Outline

Academic Year 2020/2021 – First Semester

Lecturer: Prof. Dr. Maurizio Murgia, Ph.D., M.B.A.

This syllabus and outline describe policies, procedures and the timetable for this course. Please read it. You will find yourself less disoriented and stressed-out if you read it now, at the beginning of the course. It will make your life more predictable. You will also save yourself time and effort, as the syllabus will answer questions you would otherwise have to run around frantically at the last minute trying to find the answer to.

Last revision: Thursday, 05 November 2020



How to locate and contact me: Office: E501 (School building fifth floor). Direct phone: 0471-013110 - e-mail: [email protected] If you have quick questions, you may email me by using an UNIBZ email account and put the course name in the subject heading. Be aware that I’ll not reply to emails related to this course teaching matters if they are sent by a not-UNIBZ email accounts. If you need longer consultations, it would d be advisable to book an online appointment into TEAMS platform, preferably during course office hours. 1. Course brief description Corporate Restructuring: Mergers and Acquisitions (RMA) is a second-year course for students attending the M.Sc. in Accounting and Finance. RMA is a graduate course designed to provide the student with a master level (advanced) background on corporate restructuring activities. Most of sessions focus will be on mergers and acquisitions (M&A) which are often an integral component of growth strategy of many firms. It applies theory from industrial organization and corporate finance to the analysis of merger & acquisitions and other corporate restructuring transactions. The main subject areas covered in the course are: The costs and benefits of M&A and other restructuring transactions such as asset sales, spinoffs, carveouts; deal negotiation, tactics, defences; valuation techniques in M&A and corporate restructuring. 2. Course focus and objectives Students attending this course will learn to compare costs, risks and benefits by combining firms or business segments. This part of class is crucial as there have been many successful M&A, but at the same time there have been a troublingly high amount of M&A failures. By examining the reasons of successful and failed M&A students will learn a great deal on how to design deals when a firm wish to growth through an external strategy to adjust to a new competitive environment. The course will employ problem sets, exercises, case studies to engage participating students in the M&A activities. However, another important component of corporate restructuring are transactions designed to change ownership, investment mix or even shrink the firm size. Examples of these type of restructuring are divestitures, spin-offs, and carve-outs. Again, on these type of restructuring transactions we’ll employ similar valuation and costs and benefits analysis we examined in M&A. Corporate Restructuring Mergers and Acquisitions main educational objectives are to provide students with a sound understanding of illustrated topics and be able to analyse and respond to questions such as: a) How should an analyst or investor or manager understand M&A activity? Is Economics and Finance sufficient, or do we need to

know the underlying psychology of involved players? b) What are the main drivers of success in M&A and other restructurings? c) What are the most important details and deal characteristics we need to know to understand whether a merger, an acquisition or a

break-up decision will work?



d) How important are external advisors such as lawyers, investment bankers, accountants, in restructuring activities? 3. Pre-requisites This course is taught in a two-month time period, so it is intensive and demanding. Knowledge of topics studied in undergraduate introductory courses in finance, and in addition graduate/master level first year class in Advanced Corporate Finance is highly recommended. However, a good level of familiarity with a spreadsheet package such as Excel will help a lot to deal with exercises, case study analysis and financial computations. I specifically recommend that students have a good knowledge of all Excel financial formulas so they can quickly figure out which one to use during quantitative case study analysis as well as during final exam sessions.

4. Required Textbook and further readings (DEP) Donald M. Depamphilis, Mergers, Acquisitions, and other Restructuring Activities, 10th edition, Elsevier Academic Press 2019 (Required chapters: 1-3-4-5-7-10-11-13-16). The DEP textbook is available at UNIBZ Library at: https://libproxy.unibz.it/login?url=https://onlinelibrary.wiley.com/doi/book/10.1002/9781119380771 Some further readings and notes could be handed out in advance of specific class meetings. 5. ATTENDING STUDENTS: teaching, learning and administrative matters

5.1. Registering and using UNIBZ OLE (Open Learning Environment) platform

Students willing to attend RMA must register their name and surname in the course OLE platform and upload their Unibz ID photo. Please note the RMA a.y. 2020-2021 course self-enrolment key for ATTENDING STUDENTS is: “RMA2020as”. By completing the OLE platform registration a student will be able to access course blog discussion forum and receive access to the following course teaching material:

• Course detailed syllabus and timetable; • Problem sets and exercises; • Course case study assignment guidelines.

Students should regularly check the course OLE forum/announcements for updates, changes in the course timetable, and other important announcements.

5.2. Attending student teaching material Students attending RMA will have to build their preparation and course background on the following:

a. Main textbook DEP required chapters (see previous section 4);



b. Teaching slides (Powerpoint slides) to be presented and discussed during classroom activity. Each session teaching slides pdf file will be usually posted before class time on the OLE platform;

c. Supplementary readings uploaded in course OLE platform or available at FUB Library course Reserve; d. Case studies and ancillary material (e.g. case excel files) could be downloaded from course OLE platform.

5.3. Teaching and Learning

The class will combine background material, problem sets solution discussion, case study analyses, quantitative and qualitative analyses and discussion of relevant news. The pace of the course is swift, and mastery of the material can be time-consuming. Therefore, a substantial and continuing commitment is necessary. I believe that attending lectures, taking notes, and asking questions is an excellent way to learn the fundamental aspects of modern advanced topics in corporate finance. Next, some further suggestions to maximise your benefits and learning by attending RMA: a) Attending students are expected to be in class. Informing instructors of your possible absence, preferably by e-mail, is

not only courteous, but also shows professionalism and seriousness. However, missed classes would call for extra effort on the part of the student concerned to catch up.

b) Class participation and discussion is both expected and encouraged. This means that students will be required to do a lot of talking. Students are expected to have thoroughly read all the assigned material in advance of the class to ensure better understanding of the issues involved and to have meaningful class participation. Details of each session readings are provided in the course detailed syllabus and timetable.

c) Material covered in the required textbook (DEP) chapters not always will be repeated in class. Thus, student must be aware that for sake of time constraint, some important material would not be necessarily presented in class. Class time will be devoted to background and examples/cases discussions, which apply the material covered in the readings.

d) Students are encouraged to follow the M&A activity that is reported in the press during classroom activity and bring up issues and events associated with material covered in class. Please coordinate with me in advance. Consequently, regular reading of articles into, for example, Financial Times, Wall Street Journal Europe and The Economist, is very useful and encouraged to ensure that the appropriate connections are made between material covered in class and the current business and economic developments.

e) Teaching Assistant Dr. Andrea Toto will provide two TEAMS sessions (see schedule into detailed syllabus timeline) to search, download and interpret Corporate Restructuring and M&A data available into Refinitiv Thomson-Eikon database.



f) RMA course will host two Guest Speakers that will present further aspects of the M&A industry: a) Dr.Avv. G. Spedicato of the International Law firm Latham & Watkins; b) Dr. A. Giorgianni of Investment bank Mediobanca SpA (see schedule into detailed syllabus timeline).

6. ATTENDING STUDENT ASSESSMENT Student course final grade will be a weighted average of:

A. Class participation and problem set/case study discussions 35% B. In-class Final Test 65%

Please note that I’ll assign final grades following as much as I can as a normal distribution. However, problem set and case study discussion grades are valid for one academic year and cannot be carried over beyond that time.

6.1. Class participation, problem set, case study discussion [35%]

Approx one third of attending student final grade is related to their performance on individual work required to address problem sets and case study analysis. During class sessions I’ll cold call participating students and ask them to present their answers to problem sets as well as to case study questions.

6.2. In-class Final Test [65%]

Two thirds of attending student final grade is given from mark obtained in a 90 minute in-class test that resembles the structure of problem set and case analysis we have covered during lecture time. In-class test is open book and notes. The in-class final test is scheduled on Thursday December 3, 2020, from 3 to 5 pm. Student will access MS Word and Excel software to be used to write up answers and perform quantitative analysis. Grades will be based on both the approach taken and the correctness of the response. To obtain good marks take care to write in a very good and clear English. That will enable the grader to follow your reasoning. In marking I will evaluate spelling and grammatical style. Please note that attending students that earn a passing grade from a positive evaluation of 6.1 and 6.2 must register to and be present at final exam session date to validate their RMA course final grade.



6.3. Final Exam [100%] Attending students who do not earn a passing grade as a result from 6.1 & 6.2 have the option to sit any of three final exam sessions scheduled for next academic year (date, time and location are provided below). Final exams are closed book and closed notes to both attending and not attending students. Final Exams will cover the whole course material and be evaluated as 100% of final mark. Thus, it will contain questions and quantitative problems that are intended to check student knowledge and understanding of key aspects of corporate restructuring and mergers and acquisitions covered in class and in DEP textbook recommended chapters. To prepare the final exam, students must study material covered both in session presentations (ppt slides) and textbook’s required chapters. Grades will be based on both the approach taken and the correctness of the response. To obtain good marks take care to write in a very good and clear English. That will enable the grader to follow your reasoning. In marking final exams, the grader will evaluate spelling and grammatical style. Student must consider that failed final exam can be repeated ONLY ONCE in the same academic year.

7. NOT ATTENDING STUDENTS: Learning and Assessment

Not-attending student assessment will be through final exam only, which counts as 100% of final grade. Please read previous section 6.3 for final exam guidelines. Not attending students will have to build their preparation on the RMA course material through the following: a. Main textbook DEP required chapters. b. Teaching slides (Powerpoint slides) available on the course OLE platform; c. Suggested supplementary readings available on the course OLE platform and on the FUB Library. To register on the course OLE platform, please follow instructions from previous section 5.1 and register as NOT ATTENDING STUDENT, with 2020-2021 course self-enrolment key: “RMA2020na”.

8. Academic integrity

The Faculty of Economics and Management expect from its students a high level of responsibility and academic honesty. Because the value of an academic degree depends upon the absolute integrity of the work done by the student for that degree, it is imperative that a student demonstrates a high standard of individual honour in her or his scholastic work.



9. Course key idea:

Takeovers, like bankruptcy, represent one of Nature’s methods of eliminating deadwood in the struggle for survival. A more open and more efficiently responsive corporate society can result. Paul Samuelson 1970, p. 505. 1970 Nobel Laureate in Economic Sciences.



COURSE OUTLINE

The following outline may be modified depending on the progress of the class or if the instructor feels that some other material or topic may be more topical and relevant.

SESS

ION

DATE TIME

Classroom

TOPIC

REQUIRED READING

TEXTBOOK AND READINGS PROBLEM SET/CASE STUDY

WEEK 1

1

M-Oct 5, 20 3-6 pm TEAMS

Course Introduction Syllabus, Timetable, Classroom activity, Student assessment – Course OLE platform

M&A Overview and Background Merger Waves and Industry consolidation

DEP Ch.1


Office Hour

2

T-Oct 6, 20 3-6 pm TEAMS

Cont’d Overview of M&A markets

DEP Ch.1


Office Hour

F-Oct 9, 20 9-11 am TEAMS

TUTORING CLASS DR. A. TOTO: Thomson-Refinitiv EIKON Dataset to analyse M&A markets



COURSE OUTLINE: Continued

SESS

ION

DATE TIME

Classroom

TOPIC

REQUIRED READING


WEEK 2

3


The economics of M&A M&A method of payment M&A Valuation

DEP Ch.1-7-10-11


Office Hour

4


Case study: A compelling and pre-emptive offer for the Valspar Corp Cont’d Economics of M&A, method of payment and valuation

DEP Ch.1-7-10-11

IVEY W16751


Office Hour

5

W-Oct 21, 20 3-6 pm TEAMS

Case study: Walmart-Flipkart – a deal worth its price? Cont’d Economics of M&A, method of payment and valuation

ISB186

W-Oct 21, 20 6-7 pm TEAMS

Office Hour

F-Oct 23, 20 9-11 am TEAMS

TUTORING CLASS DR. A. TOTO: Thomson-Refinitiv EIKON – Constructing M&A outputs




SESS

ION

DATE TIME

Classroom

TOPIC

REQUIRED READING


WEEK 3

6

Th-Nov 5, 20 3-6 pm TEAMS

Guest Lecture Avv. Giovanni Spedicato LATHAM & WATKINS Law Firm The legal side of M&A transactions M&A deals process: tactics, battles and defences

DEP Ch.3

Guest speaker presentation slides on the OLE platform

Th-Nov 5, 20 6-7 pm TEAMS

Office Hour

7

F-Nov 6, 20 3-6 pm TEAMS

Cont’d M&A process Financing and Leverage in M&A Activist Investors and Hedge Funds

DEP Ch.13

F-Nov 6, 20 6-7 pm TEAMS

Office Hour




SESS

ION

DATE TIME

Classroom

TOPIC

REQUIRED READING


WEEK 4

8

M-Nov 16, 20 3-6 pm TEAMS

Case study: Tesla SolarCity Cont’d Financing and Leverage in M&A Activist Investors and Hedge Funds

HBS 9-218-018


Office Hour

9

T-Nov 17, 20 3-6 pm TEAMS

Case study: AkzoNobel Corporate Restructuring: Spinoff and Carveout

DEP Ch.16

INSEAD 1577

T-Nov 17, 20 6-7 pm TEAMS

Office Hour

10

W-Nov 18, 20 3-6 pm TEAMS

Guest Speaker: Dr. Andrea Giorgianni Managing Director Mediobanca Cont’d Corporate Restructuring II: Spinoff and Carveout

W-Nov 18, 20 6-7 pm TEAMS

Office Hour




SESS

ION

DATE TIME

Classroom

TOPIC

REQUIRED READING


WEEK 5

11 M-Nov 30, 20 3-6 pm TEAMS

Course Review and In-class final test Simulation Discussion questions and problem set


Office Hour

12

Th-Dec 3, 20 3-6 pm TEAMS

In-class Final Test Discussion Solutions to Problems and Answers to Questions

Th-Dec 3, 20 6-7 pm TEAMS

Office Hour

CLASSROOM ACTIVITY COMPLETED



Final Exam Sessions

FIRST SEMESTER – WINTER - EXAM SESSION

T-Jan 26, 2021

2:00 pm-4:00 pm TEAMS

Final Exam Session: Corporate Restructuring: Mergers & Acquisitions

M-Feb 1, 2021 2-4 pm TEAMS

Final Exam Review Office hour

SECOND SEMESTER – SPRING - EXAM SESSION

T-May 18, 2021



M-May 24, 2021 2:00 pm-4:00 pm TEAMS


THIRD – SUMMER - EXAM SESSION

F-Sept 24, 2021



Th-Sept 30, 2021 2:00 pm-4:00 pm TEAMS


m.sc. (laurea magistrale) degree program in accounting and

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