Waystar Royco is trying to get over its bad reputation caused by the issues in the...

  

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Waystar Royco is trying to get over its bad reputation caused by the issues in the Cruises division. Therefore, Kendall suggests that the business move into more of the digital space, expanding into social media, digital media, and an expansion into the metaverse. Kendall believes that such direction will ensure that the business remains profitable, while limiting the possibility that similar issues can arise in the future. The private equity investors, who own less than 25% of the shares of the business, do not like the direction the business is taking. When they had originally invested into the company, they were told by Logan that the company would always remain in the physical world – newspapers, television, cruises and amusement parts – and would never enter the digital space, which is highly competitive and risky. Kendall calls a board meeting to vote on making various acquisitions in the digital space. He's certain that his motion at the director's meeting will pass since he has the full support of his siblings and his father, who together own 75% of the shares of the business. The private equity investors try calling the siblings, but they all ignore their calls. As anticipated, Kendall passes the motion at the board meeting and the Business now has approval to move into the digital space and start making various acquisitions. Question 9 (10 points) The private equity investors who own 25% of the shares of Waystar Royco hire you and ask for your advice. Explain the options available to them. Would your advice change if this was a public company as opposed to a private company? How so? (10 marks). Question 10 (10 points) Kendall enters a contract to purchase an augmented reality company, Auger, for CAD S1 billion, so that Waystar Royco can enter the metaverse business and compete with Meta, who had purchased Oculus 7 years earlier. The Business paid a deposit of $50 million to Auger upon signing the deal, and the deal is set to close on December 20th, 2021. However, a week before the transaction is set to close, Kendall receives a phone call from Roman who informs him that Auger has just suffered a ransomware attack, and all its designs, customer data, and code are being held ransom by a company, who is seeking a ransom payment of $500 million. The Business hires you to advise them of their options. Ideally, they would like to get out of the agreement and get their deposit back. What would you advise them? (10 marks) Waystar Royco is trying to get over its bad reputation caused by the issues in the Cruises division. Therefore, Kendall suggests that the business move into more of the digital space, expanding into social media, digital media, and an expansion into the metaverse. Kendall believes that such direction will ensure that the business remains profitable, while limiting the possibility that similar issues can arise in the future. The private equity investors, who own less than 25% of the shares of the business, do not like the direction the business is taking. When they had originally invested into the company, they were told by Logan that the company would always remain in the physical world – newspapers, television, cruises and amusement parts – and would never enter the digital space, which is highly competitive and risky. Kendall calls a board meeting to vote on making various acquisitions in the digital space. He's certain that his motion at the director's meeting will pass since he has the full support of his siblings and his father, who together own 75% of the shares of the business. The private equity investors try calling the siblings, but they all ignore their calls. As anticipated, Kendall passes the motion at the board meeting and the Business now has approval to move into the digital space and start making various acquisitions. Question 9 (10 points) The private equity investors who own 25% of the shares of Waystar Royco hire you and ask for your advice. Explain the options available to them. Would your advice change if this was a public company as opposed to a private company? How so? (10 marks). Question 10 (10 points) Kendall enters a contract to purchase an augmented reality company, Auger, for CAD S1 billion, so that Waystar Royco can enter the metaverse business and compete with Meta, who had purchased Oculus 7 years earlier. The Business paid a deposit of $50 million to Auger upon signing the deal, and the deal is set to close on December 20th, 2021. However, a week before the transaction is set to close, Kendall receives a phone call from Roman who informs him that Auger has just suffered a ransomware attack, and all its designs, customer data, and code are being held ransom by a company, who is seeking a ransom payment of $500 million. The Business hires you to advise them of their options. Ideally, they would like to get out of the agreement and get their deposit back. What would you advise them? (10 marks)

Answer rating: 100% (QA)

The private equity investors have several options available to them They could sell their shares and exit the company which would be easy given the current market conditions They could try to persuade ... View the full answer