Page 112 - CL How to Read a Case Study

The objective of the CEO is to make the company as

unattractive as possible for takeover by reducing the free

cash flow that might accrue from its acquisition. At the same
time to make it as attractive as possible to its shareholders

in terms of long-term dividends.

• Issuing interim accounts allows the company to put a

more positive gloss on the performance of the

company and encourages shareholders to hold on to

their shares
• Re-valuing one third of the company’s primary assets

every year ensures that there is little hidden book value

for an acquirer to access whilst at the same time

allowing the company to build upon the true value of
the company for supporting its financial and strategic

plans

• Developing a programme of sale and lease back will
allow the CEO to access funds whist at the same time

reducing running costs and making the company less

attractive to a hostile takeover attack
• The CEO appears to wish to ensure that the company is

operating as fiscally efficiently as possible e.g.

borrowing within the industry norm of gearing/leverage