UESTION 2: ABC Inc., MNZ Inc., and XYZ Inc. compete in the mobile telecommunication industry commanding 50%, 20% and 15% resPectively. The respective capitalization of the three firms is $200m, $85m and $50m. Both ABC Inc. and MNZ Inc. are targeting XYZ Inc. which they believe has great unlocked potential. a good asset base, but lacks effective management. ABC Inc. fear acquisition of XYZ Inc. by an aggressive competitor like MNZ Inc. would be a big threat to its present market position. Under good management, XYZ Inc. has the potential to post in the excess of $5m profit every year for the foreseeable future. Indications are that ownership of XYZ Inc. are willing to sell the firm for $50m which is a fair price by all standards. Both ABC Inc. and MNZ Inc. have restrictive capital budgets of $15m and $10m, respectively, which they can use in the XYZ Inc. deal. Development Bank of Namibia (DBN) finances capital expenditure of this nature upon provisions of a bankable business plan, availability of 20% owner capital contribution, and requires a 15% haircut on borrower's collateral. ABC Inc.. MNZ Inc. and XYZ Inc. have collarateralisable assets in the sums of $18m. $10m and $31m respectively. Required: Identify and recommend a financial strategy ABC Inc. may use to finance acquisition of XYZ Inc. in order to wade off the MNZ threat. Describe the strategy, explain its objective or purpose, describe in detail how it will be implemented in this case, and what the net effect will be. ['I'OTAL: 20 MARKS]