Question
You are the principal partner of an activist hedge fund. You are playing close attention to a diversified company that has three divisions in different
You are the principal partner of an activist hedge fund. You are playing close attention to a diversified company that has three divisions in different industries. The following table shows each division's annual sales and the industry average Enterprise Value / Sales:
Sales ($ million) Industry EV/Sales
Division 1122
Division 2441.28
Division 3301.78
The company market capitalisation is $70 million and its net debt is $50 million. Is the company currently undervalued? by how much? Given the situation, what strategies should you consider implementing and how would you execute such strategies?
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Introduction to Operations Research
Authors: Frederick S. Hillier, Gerald J. Lieberman
10th edition
978-0072535105, 72535105, 978-1259162985
