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Prof. Ian Giddy

Office: Stern 9-191. Tel 212-998-0426; Fax 212-995-4233

E-mail: ian.giddy@nyu.edu Web: http://giddy.org

Web site: http://www.stern.nyu.edu/~igiddy/restructuringx.html

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Goals

Corporate restructuring involves any substantial change in a company’s financial structure, or ownership or control, or business portfolio, designed to increase the value of the firm. This course will be taught around several major topics employing in-depth group work on case studies and deal documentation. The focus will be on identifying situations that call for nonstandard corporate finance solutions, and the design and pricing of the situation-specific financing instruments. Examples of such situations include stress-induced financial restructuring, recapitalizations, private equity and leveraged buyouts, mergers and acquisitions, and divestitures. In many cases resolving these issues will require structured finance solutions.

 

Instructor

Prof. Ian Giddy is a graduate of the University of Michigan (MBA 1972, PhD 1974) and the University of the Witwatersrand (BSc 1970). He has taught finance at NYU, Columbia, Wharton, Chicago and abroad for the past twenty-five years. He was Director of International Fixed Income Research at Drexel Burnham Lambert from 1986 to 1989. He is the author or co-author of numerous articles and books, including The Handbook of International Finance , The International Money Market , Cases in International Finance , Global Financial Markets , Asset Securitization in Asia and The Hudson River Watertrail Guide .

Pedagogy

The course employs cases and problems as well as classroom lectures and discussions, and "live case studies" to offer a hands-on learning experience. We will make use of international as well as domestic examples. Each student will be expected to prepare thoroughly and to participate actively in class discussion. 

Textbook and Cases

Donald DePamphilis, Mergers, Acquisitions and Other Restructuring Activities (Academic Press, 2nd Ed.)

A package of articles and case studies (see course outline)
Other recommended post-graduation reference books:

Patrick Gaughan, Mergers, Acquisitions and Corporate Restructurings (3rd ed, Wiley)

Stuart Gilson, Creating Value Through Corporate Restructuring (Wiley Finance)
Fred Weston and Samuel Weaver, Mergers and Acquisitions (Mc Graw-Hill)
Fred Weston, Kwang Chung, Juan Siu, Takeovers, Restructuring, & Corporate Governance (2nd Ed., Prentice-Hall)
Other readings may be downloaded from the links in the course outline below. More articles and applications could be added after the course gets underway.

Grading

The course grade will be determined by the instructor based on class participation and written assignments. 

Additional Resources

The Wall Street Journal and the London Financial Times provide the most comprehensive daily coverage of restructuring and financing news. Other key resources for financial restructuring include Turnarounds and Workouts magazine and the Journal of Applied Corporate Finance .

Try the following Web sites:

• eraider.com "If they won't take care of business, we will."
• mergermarket.com Global M&A activity
• Euromoney Deals and financing
• The Financier Structured finance
• ABSnet.net
• The Financial Times
• FinanceFixit.com
• and much more at Giddy's Finance Resources on the Web

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Date	#	Topics	Readings	Assignment
Novv 13	1	Restructuring debt and equity to create corporate value	DePamphilis, Ch 1 Cost of Capital and Capital Structure Debt Rating Estimation Cost of Capital Data Handout 1	SAP (indiv. hand-in: please update info and redo the analysis) TDI A and B (HBS 9-291-064 & 9-294-088) In-class Renegotiation debtcapacity.xls
Nov 19	2	Recapitalizations and exchanges	DePamphilis, Ch 10 Recapitalizations and Exchanges Handout 2	Sealed Air A (HBS 9-294-122) Truck Toys and trucktoys.xls (indiv. hand-in)
Dec 3	3	Ownership restructuring: How much value added? Who gets it?	DePamphilis Ch 3 & 7, AOL-TW (in Ch 1), AMP (in Ch 3) Grading the Goldfield Poison Pill Handout 3	schirnding.xls telia-sonera.xls Evaluate Goldfield restructuring Mardi-Gras Merger Negotiation (initial valuation hand-in, then in-class team work)
Dec 11	4	Corporate Breakups/ Bankruptcy and restructuring	DePamphilis, pp 544-555. Note on Bankruptcy in the USA (HBS 9-292-062) Handout 4	Marriott (HBS 9-294-090) Pinault-Printemps-Redoute breakup.xls & marriott.xls Loewen 1-2-3 Deaths-r-us In-class restructuring excercise
Dec 17	5	Structuring a Management Buy-out	DePamphilis, Ch 9, 11 Leveraged Finance Handout 5	Mushroom Energy (indiv. hand-in) Flexics (Group negotiation assignment) lbocapacity.xls
Jan 22	6	Acquisition Strategy and Due Diligence	DePamphilis Ch 5 Due Diligence: Magazines Sample Due Diligence Checklist Handout 6	Buy Now and Save (indiv. hand-in: one-page due diligence priorities for this magazine acquisition)
Feb 5	7	Negotiating Price and Terms of an Acquisition	DePamphilis Ch 10 Sample Letter of Intent Handout 7	Active Generation (Group assignment: propose price and terms for this acquisition)
Feb 12	8	Post-Merger Integration	DePamphilis Ch 6 Postmortem of a Healthcare Merger Post-Merger Integration: Airlines Handout 8	Penn State and Guisinger (Read for discussion) Taca and Lacsa (Group assignment: list steps for successful post-merger integration of two airlines)

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