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Essay / Research Paper Abstract
This 5 page paper looks at a scenario provided by a student, CMI want to reach an agreement for the acquisition of CTS. The background to the case is given and different methods and approaches to negotiation are considered, including arbitration, medication, an inquisitorial approach, an adversarial approach and providing impetus. Each is assessed and the best, as well as contingency approach is recommended. The bibliography cites 3 sources.
Page Count:
5 pages (~225 words per page)
File: TS14_TECMIneg.rtf
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Unformatted sample text from the term paper:
different approaches to negotiations and different scenarios can benefit from different approaches. Looking at a case study the different approaches can be considered. 2. Background to the Case
Corporate Mortgage Insurance (CMI) were trying to acquire Corporate Transfer Services (CTS). Informal discussion had been held with principle shareholders. CMI see the ability
to make the acquisition as the first step in developing and growing a more diversified business, however it is the first major acquisition being undertaken by CMI. The management
of CTS are looking at selling an 80% interest and have presented CMI with an attorney undertaken valuation in excess of $5 million, much higher amount than CMI wanted to
pay. CTS had only just been breaking even and were suffering from a shortage of equity that was limiting the growth and the company net worth of was $420,000 as
despite a high level of assets there were also high levels of liabilities. There were personal guarantees by 3 of the 4 stock holders for $2 million in CTS. However,
it was considered the acquisition was risky as it was possible business could trial off. CMI are asking their parent company for a total of $9 million, $8 million
to use to build the company and $1 million for the purchase with a price offered ?600,000 more than the book value, but the starting point was $400,000 more than
the net value and the taking on the $2 million that was currently guaranteed by the 3 stockholders, for 100% ownership. The question is how the negations should take place
as the offer is much lower than the firm arte looking for. It is apparent that CTS want to be acquired, but the issue is going to be the price.
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