MBA/540 – Maximizing Shareholder Wealth

Problem SolutionUniversity of PhoenixWeek Six ? November 3, 2008MBA/540 ? Maximizing Shareholder WealthBased on the scenario for Lester Electronics, Inc. we determined the guild is heading in a new direction. Implementing the new imagery began with the decision to merge garland and Shang-Wa and will trickle pull down to employees to increase sales. While opposition is not an issue for the companies, a hostile takeover threat could conquer the efforts of merger completion. competent financing options will enable the new consolidated gild to explore all avenues logically feasible and proceed to part the needed steps. The overall outcome will be in effect(p) to the follow, the employees and the shareholders.

Issue and Opportunity IdentificationLester Electronics ( wreath) has been the sole distributor of capacitors for the consumer and industrial products manufacture by Shang-Wa. LEI never marketed this product outside the joined States and managed to achieve and maintain annual revenue of $500 million. Shang-Wa allows LEI to renew this contract annually with the stipulation of purchasing $1 million wholesale for 65 years.

This agreement works intimately for both companies until recently when an offer was made by a competitor called Transnational Electronics Corporation interested in getting LEI. Due to growing demand Shang-Wa realizes more work is required although Mr. Lin is reaching his peak and prepares for retirement.



In order to walk forth from his companionship; Mr. Lin wants to run across LEI is able to purchase this company and continue the growth opportunities currently in place.

LEI has heady to merge with Shang-Wa, as a stable and profitable company this merger will give Shang-Wa the finances required to bide competitive. One financing problem presented is the rate of growth for LEI compared to Shang-Wa, a basic rule to acquisition evaluation is to ensure NPV to shareholders is positive. Mergers do not always transpire...

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