Re: Bid Disney

[Craig Cartier]

Potential response:

Disney representatives:

Thank you for your carefully thought out and considerate reply.

To address your concerns, we do understand that our bid was below the market price of Disney.  Unfortunately, as your own analysis would have likely shown, the cash flows of Disney in the near future are not sufficient to justify a high market price.  Depending on the assumptions, the actual DCF valuation may vary; however, we do not see any scenario with reasonable assumptions which justifies a price at or above the current market value.

We believe that the market does not currently understand or appreciate the implications of this DCF, but if such an analysis is made public, we believe the market will swiftly react, bringing the price more in line with our evaluation.  Such a drop in price is also likely to make investors very wary of Disney, and potential bidders may be scared away.  Given this context, we believe a bid below the Disney market price is appropriate.

We would welcome an opportunity to discuss this further with you.

Craig

On Tue, Feb 26, 2013 at 8:44 PM, Mareike Termühlen <Mareike.T...@gmail.com> wrote:

Hello Team Guacala,

thank you for your initial bid. Unfortunately, the price offered is considerably below both our valuation and the current market price of Disney (which is at 53.88$/share). We assume you are aware of the fact that other parties are also interested in buying Disney and generally deals are executed at a premium to the market price. In addition, you might take into consideration the tremendous growth potential Disney offers due to its superior content distribution platforms (!) and integrated portfolio. We are looking forward to receiving a revised bid.

Regards,

Group 2AM

On Tue, Feb 26, 2013 at 8:31 PM, Pedro Pinto <pedrogonc...@gmail.com> wrote:

Hello Mareike,

Here is our bid.

Regards

Team Guacala (Section A)

[Craig Cartier]

Hey guys, can we have a call briefly on Saturday to speak through this?  I think we could quickly (<30 min) put down some clear assumptions that make our argument stronger.

I feel we're in danger of a bad grade on this, and we'll be under close scrutiny since our bid was so low.  If we justify our assumptions (for example, the fact that capex was historically growing at a similar rate to our projection) we can push back on some of that scrutiny.

I'm not sure what assumptions were made on each part, but if we're all on the same call and can communicate we can get all our knowledge together.

Cool?

C

On Fri, Mar 8, 2013 at 8:00 PM, <teresa....@alumni.esade.edu> wrote:

Dear all
Could you please send to me and to Santi minguez the presentation and the final excel with the valuation?
Thank you and have a nice weekend
Best
Teresa

Enviado desde mi iPhone

El 01/03/2013, a las 15:03, Mareike Termühlen <Mareike.T...@gmail.com<mailto:Mareike.T...@gmail.com>> escribió:

Dear Team 2 Section A,

we regret to inform you that we decided to accept the offer of the other interested buyer since it was economically more attractive. However, we are looking forward to cooperations with you in the future.

Best,

Team 2 Section B

On Wed, Feb 27, 2013 at 7:16 PM, Craig Cartier <ccar...@gmail.com<mailto:ccar...@gmail.com>> wrote:
Disney representatives:

Thank you for your carefully thought out and considerate reply.

To address your concerns, we do understand that our bid was below the market price of Disney.  Unfortunately, as your own analysis would have likely shown, the cash flows of Disney in the near future are not sufficient to justify a high market price.  Depending on the assumptions, the actual DCF valuation may vary; however, we do not see any scenario with reasonable assumptions which justifies a price at or above the current market value.

We believe that the market does not currently understand or appreciate the implications of this DCF, but if such an analysis is made public, we believe the market will swiftly react, bringing the price more in line with our evaluation.  Such a drop in price is also likely to make investors very wary of Disney, and potential bidders may be scared away.  Given this context, we believe a bid below the Disney market price is appropriate.

We would welcome an opportunity to discuss this further with you.

On Tue, Feb 26, 2013 at 8:44 PM, Mareike Termühlen <Mareike.T...@gmail.com<mailto:Mareike.T...@gmail.com>> wrote:
Hello Team Guacala,

thank you for your initial bid. Unfortunately, the price offered is considerably below both our valuation and the current market price of Disney (which is at 53.88$/share). We assume you are aware of the fact that other parties are also interested in buying Disney and generally deals are executed at a premium to the market price. In addition, you might take into consideration the tremendous growth potential Disney offers due to its superior content distribution platforms (!) and integrated portfolio. We are looking forward to receiving a revised bid.

Regards,

Group 2AM

[Pedro Pinto]

cool!

tomorrow, I am available until 19:00!

See you guys

PS: the ppt of sheema's tutorial is an excellent support to help study finance

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[Craig Cartier]

Let's say 2pm...

[Albert Morgenstern]

I won´t be able to amek it. Sorry guys. Just tell me whatever I have to do and I´ll do it. 

_________________________

Albert Morgenstern

morgenste...@gmail.com

[Pedro Pinto]

I think i will be late for the 14:00 hangout... maybe 15:00?

See you

[Karen Chiu]

15:00 will be better for me. 

2013/3/9 Pedro Pinto <pedrogonc...@gmail.com>

[Paulina Ortiz]

Sounds good....

[Craig Cartier]

OK, doc and updated spredsheet are in Finance Rocks-> Final Submission.  Feel free to take a look today and I'll send tomorrow...send any feedback before then if you want to change anything.

Happy studying!

C

[Craig Cartier]

No problem Albert.  Just can you please write a 2 page paper detailing why you weren't able to make it, how you think that made the rest of us feel, and how you think you can make it up to us.

Craig

[Pedro Pinto]

Looks good for me!

I would just add that we had the Buyer role, so all our assumptions were prudent-based...

makes sense?

[Craig Cartier]

Yes, will add

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[Craig Cartier]

Added in conclusion section, will submit manana

[Craig Cartier]

Hello Professors Teresa and Santiago,

As requested, please find our calculations and presentation attached.

As the presentation was voiced over, we thought it may also be helpful to reference the summary document also attached which contains the main points to our valuation.  This also will serve as a good guide to the calculations spreadsheet, as it explains each worksheet.

Particularly as we submitted a bid far below the market price, we thought it would be more important to make our assumptions clear.  You'll see these assumptions justified clearly in the calculations spreadsheet and the summary document.

Please let me know if there are any questions and thank you very much.

Craig

On Fri, Mar 8, 2013 at 8:00 PM, <teresa....@alumni.esade.edu> wrote:

Dear all
Could you please send to me and to Santi minguez the presentation and the final excel with the valuation?
Thank you and have a nice weekend
Best
Teresa

Enviado desde mi iPhone

El 01/03/2013, a las 15:03, Mareike Termühlen <Mareike.T...@gmail.com<mailto:Mareike.T...@gmail.com>> escribió:

Dear Team 2 Section A,

we regret to inform you that we decided to accept the offer of the other interested buyer since it was economically more attractive. However, we are looking forward to cooperations with you in the future.

Best,

Team 2 Section B

On Wed, Feb 27, 2013 at 7:16 PM, Craig Cartier <ccar...@gmail.com<mailto:ccar...@gmail.com>> wrote:
Disney representatives:

Thank you for your carefully thought out and considerate reply.

To address your concerns, we do understand that our bid was below the market price of Disney.  Unfortunately, as your own analysis would have likely shown, the cash flows of Disney in the near future are not sufficient to justify a high market price.  Depending on the assumptions, the actual DCF valuation may vary; however, we do not see any scenario with reasonable assumptions which justifies a price at or above the current market value.

We believe that the market does not currently understand or appreciate the implications of this DCF, but if such an analysis is made public, we believe the market will swiftly react, bringing the price more in line with our evaluation.  Such a drop in price is also likely to make investors very wary of Disney, and potential bidders may be scared away.  Given this context, we believe a bid below the Disney market price is appropriate.

We would welcome an opportunity to discuss this further with you.

On Tue, Feb 26, 2013 at 8:44 PM, Mareike Termühlen <Mareike.T...@gmail.com<mailto:Mareike.T...@gmail.com>> wrote:
Hello Team Guacala,

thank you for your initial bid. Unfortunately, the price offered is considerably below both our valuation and the current market price of Disney (which is at 53.88$/share). We assume you are aware of the fact that other parties are also interested in buying Disney and generally deals are executed at a premium to the market price. In addition, you might take into consideration the tremendous growth potential Disney offers due to its superior content distribution platforms (!) and integrated portfolio. We are looking forward to receiving a revised bid.

Regards,

Group 2AM

[pauli...@gmail.com]

Thank u!

Sent from my iPhone

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<WD Valuation.pptx>

<Finance Calculations Team 2 Section A - Walt Disney.xlsx>

<Walt Disney Valuation - Summary Document.docx>