Valspar

Final Exam

Case Questions

1.Why is Hendrickson motivated to explore a business combination with an industry competitor?Similarly, why did Sherwin Williams intermittently contact Valspar over the past three decades to indicate an interest in exploring a business combination?

2.Is an offer price above $106 per share in the best interest of Sherwin Williams stockholders, based on the stand-alone value of Valspar and the projected synergies?In your opinion, what maximum price could be justified in a bidding contest?

3.What is your opinion about the likelihood that antitrust regulators will eventually block the deal?Are your concerns substantial enough that it impacts your recommendation regarding whether to proceed with an offer to acquire Valspar?

4.If Sherwin Williams decides to proceed with an offer, can you provide any suggestions as to how the merger agreement can be structured to avoid any problems that a potential consent decree might create?