Question: Case 4 8 _ Sun _ Microsystems Case Guideline ent Template Tr Case 4 8 _ Sun _ Microsystems Case Guideline Suggested Questions Is Sun
Case SunMicrosystems Case Guideline
ent Template
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Case SunMicrosystems Case Guideline
Suggested Questions
Is Sun Microsystems a good strategic fit for Oracle? Should Oracle acquire Sun Microsystems? What is the managerial decision?
What is the value of Sun as a part of Oracle? What approaches would you use to place a value on Sun Microsystems? How much is Sun worth as a standalone company?
Assuming a discounted cash flow valuation:
a What rate of return should Oracle require on the acquisition?
b What basecase cash flows do you forecast?
c What is your estimate of terminal value?
d What is the enterprise value of Sun Microsystems? What is the equity value?
Conduct a multiples analysis to value Sun. What economic fundamentals are reflected in the multiples?
Identify the synergies and conduct a sensitivity analysis to estimate the effect of synergies on enterprise value.
What would your bidding strategy for Sun be If a competing bidder appears, how high a price should Oracle be willing to offer? At what point would you stop negotiating any
further?
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