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Consider this case: On February 5, 1995, Clark Equipment, a maker of industrial equipment such as highway paving machines, announced its purchase of Club Car,

Consider this case:

On February 5, 1995, Clark Equipment, a maker of industrial equipment such as highway paving

machines, announced its purchase of Club Car, a manufacturer of golf carts. According to Club Car's

CEO, the purchase would allow Club Car to benefit from Clark's expertise in manufacturing, distribution,

and overseas marketing. Clark's management touted the purchases as a move away from the cyclical

industrial machinery industry.

Analysts described Clark's offer as being at "full price," implying that Clark paid a significant premium

for Club Car. On the day of the announcement, Clark's stock rose 5.1%. On the same day, Clark also

announced its intention to repurchase as much as 17% of its outstanding common stock.

In April of 1995 Clark Equipment was taken over as a result of a hostile tender offer from Ingersoll-Rand,

another large construction equipment manufacturer.

Answer the following

Clark's justification for the acquisition of Club Car,

Stock market reaction to the acquisition. Was the reaction an unambiguous endorsement?

What role might the Club Car acquisition by Clark have played in Clark's takeover by Ingersoll-Rand?

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