What Does This Announcement Mean? Form 8K of the Securities and Exchange Commission is often called the
Question:
What Does This Announcement Mean?
Form 8K of the Securities and Exchange Commission is often called the current report due to the SEC requirement that companies must report or announce any major events that shareholders should know about. Many times the reporting is rather common such as the departure of an executive or changing of the firm’s auditor. However, an important firm notification on their 8K filing is due to the announcement of a merger or acquisition which, as mentioned in the preceding chapter, has a significant impact on corporate-level strategy.
This exercise requires teams of students to analyze 8K filings in the last 12 months. You can find many sources of this information but a good place to start is your university library. Contact your reference librarian for databases and financial analysis sites that will help you efficiently identify some good candidates. Teams are to pick one 8K filing that represents a firm’s announced acquisition. It does not particularly matter if the acquisition was consummated, as the announcement in and of itself is sufficient. Once the team has identified the acquisition they must be prepared to at a minimum answer the following questions in the form of a presentation to the class:
1. Describe the acquiring firm in terms of its corporate-level strategy.
2. Analyze the firm’s press releases regarding the announced acquisition. How is the firm categorizing the event?
3. Describe the target in terms of its corporate-level strategy.
4. Now analyze the announced acquisition in terms of its new corporate-level strategy. How do you categorize the proposed entity? Does this match with press reports?
5. Rate the acquisition. Does this combination of two firms make sense in your team’s opinion?
Fraud Examination
ISBN: 978-0324560848
3rd edition
Authors: W. Steve Albrecht, Conan C. Albrecht, Chad O. Albrecht, Mark F. Zimbelman