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Essay / Research Paper Abstract
This 3 page paper identifies a primary and two secondary potential acquisition targets for Target Inc. The companies are identified, justifications are given for their recommendation as suitable targets and the funding of the acquisition is discussed. The bibliography cites 4 sources.
Page Count:
3 pages (~225 words per page)
File: TS14_TEtargetaq.doc
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Unformatted sample text from the term paper:
be attractive due to the value that the operations can add to the companies business and the shareholders, making the acquisition one where the company will gain a positive return.
It also needs to be at an attractive price. BJs has some potential in terms of the market is it serving. The wholesale club market is one that is
growing at a rate faster than general wholesale so there is growth potential. BJs which is operating in the eastern United States offers many of the same, and similar, products
to Target, so there is an alignments of business knowledge and the required business processes. There is also the potential for rationalisation
to reduce duplicate costs with the similar operations, while still expanding the market,. The BJs own brands may also expand the product ranges of Target. Furthermore, it may be argued
that BJs is relatively weak due to its smaller size, and profit margins, (operating and net) are lower at BJs, which also leaves room for improvement that will benefit the
new owner (Pilloff, 1996). This increases weakness, and susceptibility to threats, especially with potential threats from the Larger Wal-Mart and their Sams Club. The acquisition will increase potential economies of
scope and scale, and together both firms will be stronger. The merger would leave Target as the dominant partner and interests would compliment each other rather than compete. Therefore total
revenues may increases, overhead costs will decrease with rationalizations and efficiency of the post merger organization will increase value for shareholders. Question 2 The funding of the acquisition can
take place in several ways; a cash offer, an equity offer or a cash plus equity offer. When looking at the offer the amount which would need to raised, as
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