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Essay / Research Paper Abstract
This 8 page paper looks at how successful was Morrison's takeover Safeway has been. This consideration is based on the financial aspects and includes issues such as the way goodwill was treated and the creation of the negative goodwill and the impact this had on the results and the earnings per share. The bibliography cites 10 sources.
Page Count:
8 pages (~225 words per page)
File: TS14_TEmorrisafe.rtf
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Unformatted sample text from the term paper:
long Journey for Morisons that has cost a great deal more than expected. It may be argued that despite the argument that in the long term this will be a
good move strategically and was necessary for the company to be able to compete against the larger chains, such as Tesco, Asda and Sainsbury, that the move has not yet
been successful. This judgment is subjective with issues such as share price profit and seen the way goodwill was dealt influencing the way that the performance is interpreted. The
initial agreement was for the acquisition to take place with Safeway Shareholders being given 1.32 new Morrisons shares for each of their Safeway shares., however when Sainsbury made a bid
for Safeway four days later on the 13th of January following this a bidding battle commenced. Other offers were announced by Wal-Mart, the owner of Asda, Tesco and Trackdean, however
not all resulted in formal offers being made. . The acquisition was always going to be difficult and only six months before the acquisition Morrisons chairman, Sir Ken Morrison,
argued that they did not have any money to make an acquisition (Daily Mail, 2002). The market may have seen the supermarkets as a good fit (Daily Mail, 2002), but
there were also other issues which indicated that there were potential difficulties. Prior to the acquisition Safeways performance had been poor, in the previous 5 years the net level
of debt had increased by 70%, totally ?1.3 billion, raised main with the cost of refitting stores in order to try and recover falling dales as well as the share
repurchase scheme in 1999(Competition Commission, 2003). However, Morrisons had been doing well, 2003 saw the Morrisons profits improve for the 36th consecutive year (Morrisons, 2003, Daily Mail, 2003). However not
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