Module code: LLB020X311S
Module title: Corporate Finance and Acquisitions
Type of assessment: Coursework 1 (2500 words Investment Advice Report) [50%]
Assessment Task
This assessment asks students to analyse an acquisition proposal and prepare an advisory report for the client (the acquiring company). The analysis will be based on the background and financial statements of the acquiring company and two potential target companies, which are provided in appendix 2 and in the Assessment Information Section on the Moodle site. Students will evaluate the strategic fit of the acquisition for the buyer, assess the financial performance of the target company through ratio analysis, and consider key legal compliance issues related to the acquisition. The goal is to offer actionable recommendations to the buyer regarding the acquisition.
Please note: the acquiring company and target companies’ information will be provided in the Assessment Information Section on the Moodle site.
The assignment should include the following:
Introduction: Clearly state the objective of the report (i.e., providing financial advice on an acquisition). Provide context on the acquiring company, such as company profile, industry overview, and key company strategic objectives and general financial position. Outline the key areas of focus in the report. Provide a brief roadmap of the sections covered in the report to guide the reader.
Strategic Fit Analysis: Assess the strategic alignment of both target companies with the acquiring company’s objectives. Identify potential synergies and growth opportunities.
Financial Analysis: Appraise the two potential target companies, use the provided financial statements to calculate profitability, activity ratios, liquidity, gearing ratios and investor ratios. Draw a comparative evaluation of the performance of the target companies based on ratio calculation results. You are recommended to provide details of the ratio calculations in the appendix.
Legal Compliance Considerations: Identify any regulatory approvals required for the acquisition, such as competition/antitrust clearance or sector-specific permits. Assess potential legal risks associated with the transaction, including intellectual property rights, data protection compliance, and employee contracts. Analyse compliance with industry-specific regulations affecting both the acquirer and the target company and highlight potential areas of concern.
Investment Advice: Provide a clear, evidence-based recommendation on whether to proceed with the acquisition. Summarise the strengths and weaknesses of investing in the two companies with a view to recommending the one with the most potential.
Appendix: It is recommended to include the tables showing ratio calculations.