Manatep bank, a Russian investment bank, has just announced the country’s first hostile takeover bid for Red October, a confectionery company in Moscow. As Chief Financial Officer of the Target Company, Yegorov must decide how to react, how much his company is worth, and what to recommend to the Board of Directors. The context of the case, the nascent Russian financial system, raises a number of interesting and complex valuation issues such as the determination of discount rates in co … Read more »

Manatep bank, a Russian investment bank, has just announced the country’s first hostile takeover bid for Red October, a confectionery company in Moscow. As Chief Financial Officer of the Target Company, Yegorov must decide how to react, how much his company is worth, and what to recommend to the Board of Directors. The context of the case, the nascent Russian financial system, raises a number of interesting and complex valuation issues such as the determination of discount rates in countries with high inflation and unstable governments, insecure property rights and poor financial information. The lack of financial and institutional infrastructure provides a stark contrast to the financial markets and acquisitions in the more developed countries.
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from
Benjamin C. Esty,
Alan Bigman
Source: Harvard Business School
20 pages.
Publication Date: Jun 18, 1996. Prod #: 296084-PDF-ENG
Hostile Bid for Red October HBR case solution