Unit Information Management System

Mergers and Acquisitions (FINA5603, TS-T-3, 2017, Crawley)




UWA Business School




Unit Outline




Mergers and Acquisitions


FINA5603


TS-T-3, 2017


Campus: Crawley


Unit Coordinator: Professor Raymond Da Silva Rosa


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Copying of this material by students, except for fair dealing purposes under the Copyright Act, is prohibited. For the purposes of this fair dealing exception, students should be aware that the rule allowing copying, for fair dealing purposes, of 10% of the work, or one chapter/article, applies to the original work from which the excerpt in this course material was taken, and not to the course material itself

© The University of Western Australia 2001



Unit details

Unit title Mergers and Acquisitions
Unit code FINA5603 Credit points 6
Availability TS-T-3, 2017 (29/05/2017 - 21/07/2017)
Location Crawley Mode Face to face

Contact details

Faculty Business School
School UWA Business School
School website http://www.business.uwa.edu.au/
Unit coordinator Professor Raymond Da Silva Rosa
Email ray.dasilvarosa@uwa.edu.au
Telephone 6488 2974
Consultation hours By appointment, preferably made via email.
Lecturers
Tutors/ Demonstrators/ Facilitators
Unit contact hours

Lecture time:

9:00am - 5:00pm
Friday 2 June
Saturday 3 June
Friday 16 June
Saturday 17 June
Saturday 8 July

Lecture venue:

MBA Full Time students; please refer to the online iCalendar for the most up-to-date timetable information.

MBA Flexible students; please check the current timetable on the UWA Business School website: www.business.uwa.edu.au/students/timetables

 
Online handbook http://handbooks.uwa.edu.au/units/unitdetails?code=FINA5603
Unit website https://lms.uwa.edu.au

Unit rules

Prerequisites ACCT5602 Accounting and FINA5530 Managerial Finance; enrolment in the Master of Business Administration (coursework) or the Master of Business Administration (coursework and dissertation); or approval from the Faculty of Business only, which will be determined with regard to relevant documented professional work experience.
Corequisites
Advisable prior study
Incompatibility
Approved quota

Unit description

This unit presents theories and empirical evidence on mergers and acquisitions focusing on the implications for managers. The aim is to develop an analytical framework that allows students to identify relevant information and provide a basis for selecting appropriate action. There is recourse to concepts developed in other units. Students find concepts covered in organisation theory, finance and strategy classes particularly helpful.

Introduction

I enjoy researching and teaching about M&As. It is an intriguing subject that lends itself to rigorous analysis yet there remains a very human element to M&A implementation and execution that ensures analysis alone is insufficient to guarantee a happy outcome.  In this course I hope to show you the value and limits of rigorous analysis and also give you a sense of the excitement generated by M&As.

Unit content

The course will address the following topics:  valuation (but note important caveat in next paragraph); the merits of diversification versus focus in corporate strategy; the conditions and industries in which private equity can create wealth; potential pitfalls in merging firms; the value and processs of undertaking due diligence in M&Ss; valuing high-tech acquisitions as real options; issues in merging professional services firms; and the regulation of the takeover market.

Valuation is an important part of M&As and this unit will entail review of some Excel-based valuation models. However, the unit is NOT principally about valuing M&A deals via financial models. There are two reasons. One is that there are many different, important facets of M&A transactions many of which will be reviewed in the case studies. Focusing on financial valuation models to the extent required to develop a specialised expertise is not viable in a five-day long unit without leaving out material likely to be more relevant from a senior managerial perspective. The other reason is that financial models of M&A deal value are subject to considerable imprecision and the estimated values are highly contingent on market conditions. One implication of the imprecision in estimates of M&A deal value is that, in most cases, managers must base their decision with respect to M&A deals on relatively simple valuation models.

The unit will feature a presentation on private equity by Mark Dutton, Director at Banksia Capital, a guided tour through the Deloitte M&A Deal Room by Nikki Ivory and Omesh Motiwalla, Partnera at Deloitte and presentations by Diane Smith-Gander, Chairman of Transfield Services, director of Wesfarmers Ltd (Australia's largest conglomerate) and Mark Paganin, a leading M&A lawyer who is a Partner at Clayton Utz. You will be encouraged to interrogate the industry practitioners to assess the relevance of the concepts you are exposed to in FINA5603.

Unit goals

The objectives of this subject are to enable students to: (a) Understand the basis for M&A transactions; (b) Identify the key issues in valuing M&A deals and the strengths and weaknesses of different valuation approaches. (c) Develop a managers’ perspective on the drivers of M&A success via analysis and discussion of case studies. (d) Be acquainted with the regulatory framework of M&A and the implications for deal success; and, (e), become familiar with the share market consequences of M&A, an important area for company managers, portfolio managers and active market trades.

Learning outcomes

Students are able to (1) demonstrate an understanding of the link between firm competencies and a mergers and acquisitions strategy; (2) identify the relevance of different valuation approaches (e.g. discounted cash flow, relative valuation and real option); (3) appreciate the level of precision possible and ways of bridging the 'valuation gap' between potential acquirer and the target; and (4) identify the potentially problematic issues in a mergers and acquisitions deal from a regulatory perspective.

Unit structure

(See Timetable)

Unit schedule

DayDateLecture Topic
NOTE: The order the topics covered may change subject to the availability of industry presenters.
1Friday 2 JuneIntroduction; Key Topics in M&A
Diversification or Focus?
Private Equity - Presentation by Mark Dutton, Director at Banksia Capital, Perth-based private equity firm
2Saturday 3 JuneValuation: Analytical Framework
Valuation using Real Options
Shareholders' Perspective on M&A
3Friday 16 JuneWalk-Through M&A Deal Room at Deloitte (8:45 am start in the CBD); PM - Post-Merger Integration
4Saturday 17 JuneM&A and Professional Services Firms
Presentation by Diane Smith-Gander, Chairman , Broadspectrum, Non-Executive Director, Wesfarmers.
Presentation by Mark Paganin, M&A Specialist, Partner, Clayton Utz
5Saturday 8 JulyOverview of M&A Regulation
Role of Advisers - Presentation by Industry Practitioners (if time available)
Course Review
Final examinationFriday 21 July

Teaching and learning responsibilities

Teaching and learning strategies

The unit will be delivered over five days. While the total calendar time spent in class is short, the long 8-hour days make it a challenge to maintain efficiency in learning. Towards this end, delivery of material will comprise a mixture of presentations by the lecturer, class discussion of issues and working through problems. To maximise your chances of being engaged through the day, it is important that you complete the essential pre-reading and also be prepared to review material with a critical eye and make observations and queries whenever you find a point either difficult to follow or simply misguided from your point of view. Active debate is always welcome and helpful.

Teaching and learning evaluation

You may be asked to complete two evaluations during this unit: The Student Perception of Teaching (SPOT) and the Students’ Unit Reflective Feedback (SURF). The SPOT is optional and is an evaluation of the lecturer and the unit. The SURF is completed online and is a university wide survey and deals only with the unit. You will receive an email from the SURF office inviting you to complete the SURF when it is activated. We encourage you to complete the forms as your feedback is extremely important and can be used to make changes to the unit or lecturing style when appropriate.

Attendance

Participation in class, whether it be listening to a lecture or getting involved in other activities, is an important part of the learning process, therefore it is important that you attend classes. More formally, the University regulations state that ‘to complete a course or unit students shall attend prescribed classes, lectures, seminars and tutorials’. Where a student, due to exceptional circumstances, is unable to attend a scheduled class, they are required to obtain prior approval from the unit coordinator to be absent from that class. Any student absent from class without having had such absence approved by the unit coordinator may be referred to the faculty for advice and may be required to withdraw from the unit.

Charter of student rights and responsibilities

The Charter of Student Rights and Responsibilities upholds the fundamental rights of students who undertake their education at the University of Western Australia.  The University's charter of Student Rights and Responsibilities is available at www.governance.uwa.edu.au/procedures/policies/policies-and-procedures?method=document&id=UP07/132

Student Guild contact details

The UWA Student Guild is the peak representative body for all students enrolled at UWA. The Guild Student Assist team (consisting of qualified social workers and counsellors) can provide independent, confidential advice on anything affecting your study, including financial, academic, and welfare matters. The Guild also offers hundreds of events, student clubs, volunteering and leadership opportunities, and member discounts. More information and contact details can be found at www.uwastudentguild.com.

Uses of student feedback

ACE/AISE/CARS

Your academic orientation includes three online units which you must complete within the first 10 weeks of your enrolment:

AACE1000 Academic Conduct Essentials (ACE)  (just this for postgraduate)
INDG1000 Indigenous Study Essentials
CARS1000 Communication and Research Skills

Information for students with disabilities

The University has a range of support services, equipment and facilities for students with a disability. If you would like to receive advice on these services please email uniline@uwa.edu.au or visit www.student.uwa.edu.au/life/health/uniaccess

Using peer feedback to assess team contributions

The online tool SPARKPLUS may be used to assess individual contributions to team work. Where Spark is used you will be required to provide feedback to, and receive feedback from, your team members. Based on a series of answers from each team member SPARKPLUS automatically produces two weighting factors: your RPF and SAPA. The use of SPARKPLUS will be explained in class and more information is available on LMS.

Assessment

Assessment overview

Assessment information is provided in the unit outline.

Assessment mechanism

Assessment #ComponentWeightDue DateRelates To Outcomes
1Class participation10%Ongoing1 - 4
2Group assignment30%Monday 10 July by 5:00pm1 - 4
3Final examination60%Friday 21 July1 - 4

Assessment items

ItemDescriptionSubmission Procedure
#1 - Class participationStudents will be awarded a grade based on their participation during the teaching weekends. Class discussion provides an opportunity to consolidate understanding of the theory developed and use of the theory to resolve M&A issues such as the link between firm competencies and M&A strategy, merits of different valuation approaches, and regulatory obstacles. In class
#3 - Group assignmentGuidance and instructions will be provided during the teaching weekends. The group assignment provides a "rich" context to apply all the principal learnings of the course.Via LMS
#2 - Final examinationTwo hour closed book exam. Students will be required to answer 4 out of 6 questions.
Details will be announced via LMS closer to the exam date.

Academic literacy and academic misconduct

The University of Western Australia takes very seriously the matter of academic misconduct by students and has policies in place that define misconduct (including plagiarism) and the penalties that apply. The consequences for misconduct can be severe, including exclusion from the University.

All students are expected to make themselves aware of the definitions and the policies relating to academic misconduct, found at the websites below, and with any additional requirements or stipulations that may be provided by individual coordinators www.governance.uwa.edu.au/procedures/policies/policies-and-procedures?policy=UP07%2F21

Appeals against academic assessment

The full regulations governing appeals procedures are available in the University Handbook at http://rules.handbooks.uwa.edu.au/rules/student_rules/

Penalty for late submission

A penalty of 5 per cent of the total mark allocated for the assessment item is deducted per day for the first 7 days (including weekends and public holidays) after which the assigned work is not accepted. Each 24-hour block is recorded from the time the assignment is due.

 Penalty for exceeding word limit

Where an assignment exceeds the word limit, a penalty of 1 per cent of the total mark allocated for the assessment task applies for each 1 per cent in excess of the word limit.

Textbooks and resources

Recommended texts

There is no set textbook for this unit but most seminar sessions include selected readings. The ones marked “essential pre-reading” are just that. You will not be able to participate effectively in class if you have not read the essential pre-reading beforehand. The readings will be placed on the learning management system (LMS).

Suggested alternate texts

Additional texts

Technical requirements

Software requirements

It is expected that students will have acces to Excel Application. Ideally, each student will have a personal laptop equipped with the Excel Application to work through examples in class. Excel file templates will be provided.

Additional resources and reading

Other important information



Standard of assessment

The Business School must ensure that the processes of assessment are fair and are designed to maintain the standards of the School and its students. The School follows the UWA marks and grades distribution:

Higher distinction

(HD)

80-100%

Distinction

(D)

70-79%

Credit pass

(CR)

60-69%

Pass

(P)

50-59%

Fail

(N+)

45-49%

Fail

(N)

0-44%

Failed component

(FC)

 

 

The scaling of marks to ensure comparability between classes is an acceptable academic practice. The School and Board of Examiners have the right to scale marks where it is considered necessary to maintain consistency and fairness.

Quality assurance

Your assessed work may also be used for quality assurance purposes, such as to assess the level of achievement of learning outcomes as required for accreditation and audit purposes. The findings may be used to inform changes aimed at improving the quality of Business School programs. All material used for such processes will be treated as confidential, and the outcome will not affect your grade for the unit.

Approved calculators for examinations

The University permits only the use of calculators in examinations when the calculator has an approved sticker and the examiner permits their use.  If the student does not have an approved sticker on their calculator, they will not be permitted to use the calculator.  Calculators can be approved at the Undergraduate Student Centre, the Postgraduate Student Centre or at Student Administration.  Further information is available on the Business School website at www.business.uwa.edu.au/students/assessments

Special consideration/alternative arrangements

If you are unable to attend a class, tutorial or examination due to circumstances beyond your control and are seeking an extension for submission of an assignment or a deferred exam, please read valid reasons for special consideration at www.student.uwa.edu.au/life/health/uniaccess/special-consideration, complete the application form and submit at the Student Centre.
PLEASE NOTE that deferred exams are not available in Summer School units.

Acknowledging Sources of Information and the Business School Policy on Plagiarism

Student Services provides an online plagiarism portal that includes a definition of plagiarism and a link to FAQ www.studentservices.uwa.edu.au/ss/learning/online_services/plagiarism_portal

‘Turnitin' Originality Checking & Plagiarism Prevention is used in the Faculty to allow both educators and their students check written work for improper citation or misappropriated content. More information about 'Turnitin' can be found at http://turnitin.com/static/index.html

eBooks and open book exams

eBooks cannot be accessed at an examination. Please check your exam details and purchase a printed version of any book you would select to take into an open book exam.

Referencing

It is important that the referencing of any sources used in your written work is done properly, if only to substantiate the points you are making in your assignment or project.  The Harvard style is the preferred and there are some notes for guidance which have been prepared by the library staff:  ‘Citing your Sources Harvard Style’ http://libguides.library.uwa.edu.au/harvard

The EndNote software package is a really good system for building up a database of references.  Not everyone will want to invest the time in using this system but you should consider it if you intend to build up resource materials or plan to undertake extensive research in a particular area.  The library staff have also developed a tutoring package: ‘A Quick Guide to Using EndNote’ which provides the basics for using EndNote with an essay http://libguides.library.uwa.edu.au/endnote

Last day to add a unit offered in a semester

The final date to add a unit is the end of week 2 of the semester.  For further information on important dates for 2017, refer to www.student.uwa.edu.au/course/dates/important

STUDYSmarter

STUDYSmarter helps students get more out of their study by equipping you with additional skills needed at university. Explore the range of free on-campus and online services to help you develop academic communication, research, critical analysis, numeracy and study skills. http://www.student.uwa.edu.au/learning/studysmarter