Answer all (6) questions

1. How does Torrington fit with the Timken Company? What are the expected synergies?
2. What is your stand-alone valuation of Torrington? Be prepared to explain and justify all the major assumptions used in your estimate.
3. What is your with-synergies valuation of Torrington? Be prepared to explain and justify all the major assumptions used in your estimate.
4. Should Timken be concerned about losing its investment-grade rating? How do Timkens financial ratios compare with those of other industrial firms in 2002? How would those ratios change if Timken borrowed $800 million, for example, to buy Torrington?
5. If Timken decides to go forward with the acquisition, how should Timken offer to structure the deal? Is Ingersoll-Rand likely to want a cash deal or a stock-for-stock deal?
6. What are the risks for Ingersoll-Rand of accepting Timken shares for some or all of the consideration?