Monday, June 1, 2020
Are institutional investors influence over publicly listed companies over-stepping the mark? A case study of De Vere Group Plc and Guinness Peat Group Plc. Table of Contents 1.1 The Climate Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦..Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦.. 3 Chapter 2 Ã ¢Ã¢â ¬Ã¢â¬Å" The Takeover Attempt Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦.. 7 2.1 The Makings of An Attractive Takeover Target Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦..Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦. 7 2.2 De Vere Group Plc Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦..Ã ¢Ã¢â ¬Ã ¦.. 10 2.3 Guinness Peat Plc Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦.Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦. 17 Chapter 3 Ã ¢Ã¢â ¬Ã¢â¬Å" Literature Review Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦ 24 3.1 Stakeholders Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦.Ã ¢Ã¢â ¬Ã ¦. 24 3.2 Corporate Governance Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦.Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦. 25 3.3 Company Ownership Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦. 26 3.4 Shareholder Powers Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦.. 29 3.5 Management Responsibilities Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦.Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦. 30 Chapter 4 Ã ¢Ã¢â ¬Ã¢â¬Å"Conclusions and Recommendations Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦..Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦ 31 Bibliography Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦..Ã ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã ¦.Ã ¢Ã¢â ¬Ã ¦.Ã ¢Ã¢â ¬Ã ¦ 34 The beginning of the industrial revolution created new opportunities as well as problems for the business enterprises of that era in that there were a limited number of individuals as well as investors who could finance the large sums of capital needed to underwrite the vast scale of equipment, resources and expansion required. In order to capitalize upon the numerous opportunities which were presenting themselves as well as avoid being overexposed in any one venture, financial markets rose as a means for several investors to join in sharing the risks as well as the fina ncial investment. The beginnings of the preceding, financial markets, started in Europe to finance the industrial revolution as well as the expansionist policies of the British empire (eCommercenow, 2005). TodayÃ ¢Ã¢â ¬Ã¢â ¢s financial markets are the medium for the processing of various business financial transactions ranging from new issues to stock trading. Through the issuance of shares as well as financial reporting and public disclosure businesses are able to raise capital to finance new plant and equipment, expansion, research and development along with other purposes to increase sales, market share and bottom line performance. The ability to raise capital does come with certain expectations on the part of shareholders who hold a stake in the performance of the company, thus its directors and management must produce bottom line results. This measure of influence afforded by stock regulations and shareholder representation in the affairs of the company through annual s hareholder meetings and voting on the Board creates interesting scenarios. Shareholders are able to review managementÃ ¢Ã¢â ¬Ã¢â ¢s performance and as such can question various aspects at the shareholders meeting. Substandard performances have seen directors and executives removed from their positions, as well as serving to fuel takeover bids by investment companies who advise shareholders that they can receive a better return under their management. The reverse of this scenario also occurs. When the company has done and/or is doing well, the accumulation of assets, cash and other related positive financial aspects serve as attractive bait for various investment companies to seek to take over operations. In the United States, the quintessential corporate investment firm is Kohlberg, Kravis Roberts (KKR), known for their utilization of the leveraged buyout (LBO) through the creation of limited partnerships to take control of corporations. Known for their leveraged buyout of R JR Nabisco, Gillette, Safeway, Borden and other companies (kkr, 2005), they have acquired the reputation as corporate raiders. Known as an investment holding company, Guinness Peat Group Plc focus on acquiring positions in as well as owning public companies engaged in various industry sectors. This case study shall examine the offer by Guinness Peat for De Vere Group Plc focusing upon the reasons resulting in the offer as well as the factors contributing to same. 1.1 The Climate The events leading up to the offer by Guinness Peat Plc for De Vere Group Plc find themselves rooted in the overall climate of global as well as the British stock markets preceding 2004 when the indicated offer was tendered. 2001 saw a recession grip the United States economy that affected a drastic reduction in growth in developed as well as developing countries throughout the globe(nyu.2005). The pattern of global bull and bear markets during the prior decade had seen its fortunes tied to the economi c and stock market performances of the United States and Japan as the principle regional economic engines in the Americas and Asia. The unification effects of the European Union and the adoption of the euro as a singular measure of currency would not go into affect until January 1, 2002 (euro.com, 2005), thus EuropeÃ ¢Ã¢â ¬Ã¢â ¢s influence on global markets in 2001 was still fragmented, with Germany being the most consistent performer. Koutmos (1995) and Bae et al (1994) postulated that events, such as corporate news, job data, positive and negative developments, that transpired in the market in the United States are rapidly transmitted throughout the globe and help to influence global market performance. The preceding is a result of the dominance of the United States market in trading volume as well as being the most influential source and producer of information. The attacks on the World Trade Center in New York city, as well as subsequent commercial airliner attacks in Wa shington D.C. and Virginia, impacted global economies further intensifying the recession that had started in March of that year. The preceding view of the United States as a driver of global economies is also shared by Masih et al (2001) whose empirical evidence confirmed that price leadership in U.S. markets influences global economics and stock market indices. This market sensitivity to news from the United States creates a climate whereby international investors tend to overreact to news transmitted from this source, and be less concerned with news from other regions (Becker et al, 1995). The foregoing, along with a summary of subsequent years leading up to the 2004 offer by Guinness Peat, helps to chart the mood and climate for shareholders and investors that created the atmosphere for the preceding. The recovery in 2002 was one that showed a growth in output, but not jobs, and thus was considered Ã ¢Ã¢â ¬ÃÅ"weakÃ ¢Ã¢â ¬Ã¢â ¢ by economists. And stock markets were fur ther affected by the accounting scandals in the United States involving Enron, Worldcom and other Blue Chip firms. These contributed to a loss of confidence by investors and saw the London FTSE fall 24 percent from its May 2002 peak (Middle East Survey, 2002). The Bear market that had gripped global economies was in its third year and represented the longest consecutive period of declining stocks in the United States since 1939 through 1941 (Taylor, 2002). The foregoing also affected stock markets as well as economies in every major developed and developing country throughout the globe. It is important to understand the conditions that contributed to the long running Bear market as these events would later influence Guinness Peat Plc in its analysis of De Vere Group Plc and the need to place a major deal in its investment portfolio after some lean IPO and stock performance years. The Bear market run was driven in 2000 through 2002 by the following factors (Taylor, 2002): The Technology Bubble burst and there was an overvaluation of the stock market in other sectors as well. 2001Ã ¢Ã¢â ¬Ã¢â ¢s recession along with the slow pace of the recovery that gripped most the major developed economies, as well as most developing economies. Investor loss of confidence in analysts, companies, CEOÃ ¢Ã¢â ¬Ã¢â ¢s and Wall Street in general as a result of scandals and corporate wrongdoing. The threat of terrorism, war and varied geopolitical concerns became headline topics with scant resolution in terms of solving or resolving the fundamental causes or proponents. The significance of the preceding events manifested themselves in: The biggest bankruptcies in history as Enron with $63 billion, was followed by Global Crossings at $25 billion, along with Kmart with $17 billion, and a host of other companies, not to mention the prior dot.com shakeup which was still affecting various industries. The Sarbanes Ã ¢Ã¢â ¬Ã¢â¬Å" Oxley Act of 2002 was a sobering reminder of the potential for corporate financial reporting as evidenced by the indicated bankruptcies that preceded its passage. It was enacted to instill renewed investor confidence in the market as a result of new laws enacted to control the potential for white-collar crime with severe penalties. Governmental Actions The weakness in economies throughout 2002 caused the United States Federal Reserve to attempt to restore confidence by cutting interest rates by 50 basis points on November 6, 2002 in conjunction with a similar action by the European Central Bank which occurred on December 5, 2002. The heavy U.S. trade deficit as well as United States overspending on its budget kept markets from rebounding and created the environment whereby the U.S. dollar declined. Each of the preceding contributed to a stagnated U.S. market and a resulting weakness in major global markets thus aiding the long Bear run. It is important to understand the aspects that drove the markets down over the three year period of 2000 through 2002 as this will help to explain investor and shareholder sentiment in the United Kingdom during 2004 as well as the management rationales for Guinness PeatÃ ¢Ã¢â ¬Ã¢â ¢s De Vere offer. Taylor (2002) indicated that there were four factors to keep in mind regarding the poor perf ormance of financial markets and economies during 2000 through 2002, In order for the Bear market to come to an end, Taylor (2002) stated that two or more of the indicated factors had to change: Stock prices needed to fall, or corporate earning needed to rise in order to eliminate stock overvaluation in the market, AmericaÃ ¢Ã¢â ¬Ã¢â ¢s economy needed to recover and begin expanding, confidence needed to be regained by investors in the integrity of the stock market, and The various geopolitical threats and concerns resulting from terrorism needed to be brought under control. 2003 saw a modest recovery in the stock market and global economies taking hold. Part of the optimism was attributed to the ending of the war in Iraq, but more telling were the improved earnings reports from companies and increased dividend yields which helped to pull investor money out of bonds and back to stocks (Boland, 2003). Sellers (2004) indicated that the strength of the market recovery in 2003 was not to be found in the major indices, but in a broad look at how the average non blue chip stocks performed during that year. Sellers (2004) indicated that 5,201 of the Morningstar index of 5,999 stocks (87%) recorded stock price gains. The preceding, along with a 26% gain in the Standard PoorÃ ¢Ã¢â ¬Ã¢â ¢s 500 index where fully 92% of all the stocks recorded an increase in year end stock prices signaled across the board economic strength. For the year the NASDAQ composite increased by 50%, the Dow Jones industrial average recorded a 25% gain, and the Russell 2000 increased by 45% for its best year its 25-year existence.(Norris, 2004) These developments in the American financial markets aided as well as coincided with recoveries in other countries. The tracking of financial market and economic performance in the United States during the preceding periods, 2001 through 2003, is important as global markets are influenced by developments in the American economy. The indication of market conditions in the United States closely mirrored developments in the United Kingdom thus signaling an end to the longest running Bear market in history. It is important to note that as a result of trade, and other economic variables, that the British recovery lagged approximately three to five months behind the recovery in the United States. The market shakeouts recorded as a result of the recession, scandals, Sarbanes Ã ¢Ã¢â ¬Ã¢â¬Å" Oxley Act of 2002, and governmental actions helped to restore market stability and the resulting investor confidence. The preceding s ummary of global stock markets and economic conditions represents important background information in understanding the attractiveness of De Vere Group Plc to Guinness Peat Plc in terms of its Partial Cash Offer in 2004. The financial misreporting and other glowing corporate and industry predictions that marked the foundations of the Bear market signaled a return to equity and asset barometers as indices of corporate strength and performance and this is the corporate financial area that Guinness Peat concentrated on in its appeal to De Vere shareholders. Chapter 2 Ã ¢Ã¢â ¬Ã¢â¬Å" The Takeover Attempt 2.1 The Makings of An Attractive Takeover Target To understand the reasons as to Guinness PeatÃ ¢Ã¢â ¬Ã¢â ¢s interest in De Vere Group Plc, one must be cognizant of the workings of public companies and the environment in which they operate. These factors were present, from an historical as well as contemporary standpoint, when Guinness Peat made the internal determinati on to proceed with its Partial Cash Offer for De Vere Group Plc. In order to understand the context of such decisions by an investment company, such as Guinness Peat, evaluating which potential target to seek and for what reasons, along with an understanding of what might have been considered as the rationale(s) for making such an offer shall be explored. Founded in 1801 (Wikipedia, 2005), the London Stock Exchange is the conduit via which public companies interact with financial markets. In the United Kingdom the exchange is the watchdog over the rules and regulations governing publicly traded companies, unlike the system in the United States where the Securities and Exchange Commission as separate and autonomous government agency oversees rules and regulations. In 2001 the United Kingdom enacted the Financial Services Agency (FSA) (Carriere et al, 2002) which combines all prior United Kingdom agencies having oversight concerning securities matters under one umbrella. The role o f this agency might one day encompass a regulatory position that might be similar to the United States Securities and Exchange Commission, however at this time it operates as an independent agency Ã ¢Ã¢â ¬Ã âÃ ¢Ã¢â ¬Ã ¦that regulates the financial services industry in the United KingdomÃ ¢Ã¢â ¬Ã . (FSA, 2005) The FSA has been provided with a broad array of rule making as well as investigative and enforcement powers to enable it to meet the four statutory objectives set forth for its existence (FSA,2001): Market Confidence Ã ¢Ã¢â ¬Ã¢â¬Å" to maintain investor confidence in the financial system, Public Awareness Ã ¢Ã¢â ¬Ã¢â¬Å" to promote a clear understanding of the financial system to the general public, Consumer Protection Ã ¢Ã¢â ¬Ã¢â¬Å" to secure an appropriate measure of protection for the public, and Reduction of Financial Crime Ã ¢Ã¢â ¬Ã¢â¬Å" to reduce the extent for which it is possible to utilize a commercial enterprise for an end that is connected with the commission of a financial crime. The extent to which the London Stock Exchange is revered can be found in the fact that the countries of continental Europe have modeled their capital markets on the British system.(Carrie et al, 2002) Guinness Peat, under Sir Ron Brierley, aspires to a reputation as Ã ¢Ã¢â ¬Ã âÃ ¢Ã¢â ¬Ã ¦the Warren Buffett of the South PacificÃ ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã (Sharechat, 2001) and thus the firm has acquired a reputation as a corporate raider. While the term itself sounds somewhat ominous the actual practice (corporate raid), is a viable financial strategy. A corporate raid is when an investment company (usually the initiator of such events) seeks a hostile takeover of a public company whereby the assets of the acquired company are sold off in pieces and the prices such a liquidation of the entities within that business produce exceed what was paid. As a result, the acquired company in most cases no longer continues to operate. The term Ã ¢Ã¢â ¬Ã âhostileÃ ¢Ã¢â ¬Ã i s utilized in this instance as Guinness PeatÃ ¢Ã¢â ¬Ã¢â ¢s offer for De Vere Group Plc was targeted at shareholders to cause them to vote in favor of the Partial Cash Offer. The effect of corporate raiders in terms of the economy as well as the shareholders of the companies involved is still a source for wide debate. There are proponents who believe that corporate raids constitute a damaging activity for shareholders and the economy in that they cause and create large-scale economic disruption of activity, not only for the affected company, but for the companies that do business with it as well. It is pointed out that the closing of factories, branches or business outlets create levels of unemployment for those workers whose jobs disappear as a result. On the other side of the coin there are proponents who believe that the existence of corporate raiders help to cleanse the market of companies where management has been lax in managing assets. An example of the preceding is wh en a company has large assets and a low stock price. In such an instance company management should seek higher stock pricing thus increasing investor confidence and providing shareholders with either dividends or the opportunity to trade shares and derive a profit. As a result some argue that corporate raiders serve to prevent business managers from become complacent and thus find means to redistribute assets (capital) from lower performing sectors of the economy to more productive sectors. There are those who point to the fact that the existence of raiders is a factor as to why the market performance of companies based in the United States during the 1990Ã ¢Ã¢â ¬Ã¢â ¢s exceeded those in Germany and Japan where corporate raiding is not permitted. The maximization of shareholder value is one of the responsibilities of management in seeing to the interests of the companyÃ ¢Ã¢â ¬Ã¢â ¢s shareholders, as well as the company itself. (Mayer, 1999) The recession climate that gr ipped capital markets and global economies from 2000 through the beginnings of 2003 created a lot of anxiety on the part of shareholders as well as investment firms in that the opportunities to yield profitable outcomes had diminished to scant few opportunities. The recession period followed one of the longest running Bull markets, 1989 through 1999, which saw the dot.com, technology and telecom revolutions. The pent up desire to return to the profit making of that era could have been a factor in Guinness PeatÃ ¢Ã¢â ¬Ã¢â ¢s De Vere offer. In order to equate if this, or other factors are the reasons behind this event, an analysis of both De Vere Group Plc and Guinness Peat Plc is in order. The preceding will examine these companies during 2000 through 2004 in order to gain a perspective on their operations, profitability and other factors, as these areas had an impact on the Offer of Guinness Peat in 2004. 2.2 De Vere Group Plc Trading on the London Stock Exchange as De Ve re Group Plc (DVR), the company engages in operating in both the hotel and health / fitness sectors, two areas that the company sees as growth oriented. This focus was arrived at in 1999 when the company opted to transform its core business as a diversified leisure group to the current corporate positioning. The preceding shift in direction was under taken to maximize shareholder value and entailed management shifting resources, administrative systems and personnel from the tenanted as well as managed pub businesses. The tenanted division, which consisted of the Inn Partnership, was sold for ÃâÃ £370 million in January of 1999, and the managed division, Greenalls Pubs and Restaurants, was sold for ÃâÃ £1.14 billion in December of 1999. Management utilized a portion of the proceeds from these sales to return ÃâÃ £529 million to the companyÃ ¢Ã¢â ¬Ã¢â ¢s shareholders by a special dividend and capital payment, while ÃâÃ £392 million was utilized to pay off debt. Th e structured company was changed from Greenalls Group to De Vere Group in 2000. The preceding sale of the indicated business entities signaled managementÃ ¢Ã¢â ¬Ã¢â ¢s intention to completely divest itself of all Tavern and drinks wholesaling businesses. This was accomplished by the end of February 2001 when 17 depots were sold and the remaining units closed. The present company, De Vere Group Plc,, consists of two hotel brands, De Vere Hotels and Village Hotels Leisure Clubs, as well as a separate health and fitness brand titled Greens. In addition to the preceding, De Vere also owns a small sized white spirits company called GJ Greenall (Drinks Business Review, 2005). De Vere Hotels are the companyÃ ¢Ã¢â ¬Ã¢â ¢s upscale market chain that consists of 21 locations. Targeted at the corporate and leisure markets these hotels have conference and a broad array of leisure facilities, including golf clubs. De VereÃ ¢Ã¢â ¬Ã¢â ¢s mid-range hotel division consists of 14 Vi llage Leisure Hotels that contain health and fitness facilities. The De Vere brand name has enjoyed public acceptance in its positioning and this has permitted the company to leverage this awareness to create De Vere Resort Ownership, which are lucrative timeshare lodges are the companyÃ ¢Ã¢â ¬Ã¢â ¢s resort properties. These lodges are currently situated in three locations: Cameron House, Loch Lomond, Slaley Hall, Northumbria Belton Woods, Lincolnshire The Greens brand consists of stand-alone health and fitness facilities that are targeted at the premium segment of the market. This divisionÃ ¢Ã¢â ¬Ã¢â ¢s consumer strategy focuses on the adult segment of the population and also appeals to families. There are 15 Greens each comprising approximately 40,000 square feet of space equipped with gyms, steam rooms, spas, saunas, pools and facilities for aerobics. De VereÃ ¢Ã¢â ¬Ã¢â ¢s GJ Greenall division manufacturers spirits under its own brand name, Greenalls Original and Daresbury Q, as well as manufacturing premium brands for Bacardi International (Bombay Gin and Bombay Sapphire). It is the performance of the company in preceding years that generated the interest of Guinness Peat in tendering its Partial Cash Offer. As such, the years succeeding the 1999 management refocus hold the answers to this question. 2.2.1 2000 The effects of the shift in corporate operations undertook by management in 1999 were revealed in the companyÃ ¢Ã¢â ¬Ã¢â ¢s Annual Report statements. The Chief ExecutiveÃ ¢Ã¢â ¬Ã¢â ¢s Operating Review summarized the financial position, in comparison to 1999, as follows: Table 1 1999 Ã ¢Ã¢â ¬Ã¢â¬Å" 2000 Comparisons Ã ¢Ã¢â ¬Ã¢â¬Å" De Vere Group Plc. (De Vere Annual Report, 2000) 2000 Turnover 1999 Turnover 2000 Pre-tax Profit 1999 Pre-tax Profit ÃâÃ £478.4m ÃâÃ £899m ÃâÃ £37.9m ÃâÃ £91.9m While the figures indicate a sharp decline from 1999 figures, they also reflect the loss of revenues from divestiture as well as the ÃâÃ £529 million which was paid to company shareholders via a special dividend as well as the ÃâÃ £392 million that was used to pay company debt. The resulting leaner company was therefore able to concentrate its energies on the new direction with a better looking balance sheet in terms of debt ratios and thus attractiveness to finance new operations from the cash derived from the sale of divisions. Although the overall revenue declined, as a result of the sale of operations and the fact that the sale of business divisions contributed just eight weeks of earnings, the companyÃ ¢Ã¢â ¬Ã¢â ¢s revenues from those businesses it retained showed an increase of 13.5 percent to ÃâÃ £232.5 million, compared against ÃâÃ £204.9 million reported for 1999. The new health and fitness divisions increased their revenues by 15.2 percent to ÃâÃ £206.6 million from ÃâÃ £179.2 million, and this combined with the core hotel operations returned a profit of 15 percent, or ÃâÃ £15.5 million. (De Vere, 2000) It is interesting to note that De Vere actually functioned in a similar manner to a corporate raider when it changed the course of its business strategy by selling off existing operations to invest and enter what management deemed more profitable business sectors. De VereÃ ¢Ã¢â ¬Ã¢â ¢s entry into the health and fitness sector focused on the inherent weakness in this growing segment which was dominated by smaller local and regional operators. The unified nature of its market positioning under a large public company added luster to its entry as the company focused on upscale market imaging and demographics. Its Greens division profited from this positioning in terms of what the public perceived as quality management decisions that were overseeing this middle market demographic entry. The facilities are new, well planned and not lacking in the latest equipment and techniques. The ability of the company to focus economic clout on facilities and equipment provided consumers with a unified and identifiable brand it could trust. The preceding resulted in a membership roster of 78,000 in the De Vere Hotel, Village Leisure and Greens divisions. 2001 The companyÃ ¢Ã¢â ¬Ã¢â ¢s move to hotels and health and leisure facilities represented the acquisition of real estate which the company either developed through the construction of new facilities or purchased via existing operations such as the Cavendish Hotel for ÃâÃ £60 million which it purchased in December of 2000. These build outs and acquisitions have the effect of strengthening the companyÃ ¢Ã¢â ¬Ã¢â ¢s balance sheet from the gain of developed properties as well as the revenue derived from these operations. In addition, memberships generate a continuous revenue stream as well as a base for marketing promotions and other activities. The companyÃ ¢Ã¢â ¬Ã¢â ¢s upscale market approach left its core business less susceptible to economic swings as a result of the relative demographic stability of the upper income profile. The company increased the number of hotel rooms under the De Vere brand to 4,303 units, representing a 10.8% increase, and generated an operat ing profit of ÃâÃ £49.7 million as opposed to the ÃâÃ £46.5. 2001 represented the companyÃ ¢Ã¢â ¬Ã¢â ¢s first full year under its new operating structure and core businesses (De Vere, 2001). The company considered a sale of its Greens division, however the events of September 11th in the United States caused the Board to rethink its position in light of the looming economic uncertainty. The global economic slowdown that followed flattened the companyÃ ¢Ã¢â ¬Ã¢â ¢s earnings and slowed the development of new facilities as well as market expansion in a tight travel and entertainment sector. Table 2 De Vere Group Plc Operating Highlights 2001 (De Vere Annual Report. 2001) 2001 ÃâÃ £m 2000 ÃâÃ £m % change Turnover 273.8 232.5 +17.7% Operating Profit 49.7 46.5 +7.1% 2002 The company managed to fair quite well in 2002 with strong performances throughout the GroupÃ ¢Ã¢â ¬Ã¢â ¢s divisions in its upscale market niche. One example is the increase of 1.4% and 0.7% in the companyÃ ¢Ã¢â ¬Ã¢â ¢s De Vere Hotel and Village Hotels Leisure Clubs, respectively. The preceding compares against industry declines of 2.9% in the countryÃ ¢Ã¢â ¬Ã¢â ¢s provincial market. (De Vere, 2002) The foregoing attests to managementÃ ¢Ã¢â ¬Ã¢â ¢s decision to target the upper income segment of the market in a defensive move against market downturns, and as a marketing move at higher profits due to disposable incomes. The preceding helped both of the companyÃ ¢Ã¢â ¬Ã¢â ¢s hotel brands to outperform the market. The companyÃ ¢Ã¢â ¬Ã¢â ¢s positioning and long-standing sponsorship of the Ryder Cup positioned it in the premium category further adding to the brandÃ ¢Ã¢â ¬Ã¢â ¢s worth. In the tough climate that impacted the business as well as consumer travel and leisure markets in 2002 as a result of the aftermath of 9/11, the De Vere Group still managed to grow by 1.8% in a receding market. More importantly the companyÃ ¢Ã¢â ¬Ã¢â ¢s stock share price managed to maintain a steady moderate upward swing during the global recession earning it the reputation as a stellar performer. The soundness of the companyÃ ¢Ã¢â ¬Ã¢â ¢s decision to build of new facilities along with acquisitions of existing upscale hotel properties saw the value of its tangible assets rise to ÃâÃ £848.473 million, and with investments standing at 6.804 million the De Vere GroupÃ ¢Ã¢â ¬Ã¢â ¢s fixed assets totaled ÃâÃ £855.277 million. Table 3 De Vere Group Plc Operating Highlights 2002 (De Vere Annual Report.2002) 2002 ÃâÃ £m 2001 ÃâÃ £m % change Turnover 293.9 273.8 +7.3% Operating Profit 51.9 49.7 +4.2% 2003 At the end of 2003 the De Vere Group had 21 De Vere Hotels representing 3,310 rooms, an increase over the 2002-year end total of 3,298. More impressively, the preceding was accomplished in a receding market. The value of the companyÃ ¢Ã¢â ¬Ã¢â ¢s fixed assets increased from ÃâÃ £855.277 to ÃâÃ £869.214, with tangible assets rising to ÃâÃ £859.114 (from ÃâÃ £848.473), and investments increasing to ÃâÃ £10.100 from ÃâÃ £6.804.(De Vere, 2003) 2003 saw the companyÃ ¢Ã¢â ¬Ã¢â ¢s stock price leave its hover between 500 and 400 ranges and move into the solid 600 category at year end. The stock performance demonstrated public confidence in the progress of the company, as well as the steady progression of successful openings and operating results in a tough industry sector. The company accepted the resignation of Paul Dermody who stepped down from the role of Chief Executive, a role which he occupied for three and a half years after forty years of service w ith the company. Carl Leaver was appointed to his post from Whitbread Plc where he was the Managing Director for Travel Inn as well as a prior position of Operations Director for MarriottÃ ¢Ã¢â ¬Ã¢â ¢s Country Club golf resort hotels. (De Vere, 2003) Table 4 De Vere Group Plc Operating Highlights 2003 (De Vere Annual Report.2003) 2003 ÃâÃ £m 2002 ÃâÃ £m % change Turnover 312.2 293.9 +6.2% Operating Profit 54.7 51.9 +5.4% 2004 2004 saw a strengthening of the hotel market in the United Kingdom after three years of decline or stagnant growth. The strengthening of the travel and leisure segment of the market permitted the company to increase the average room rates by 2.0% to ÃâÃ £84.81 (De Vere, 2004). The effectiveness of De VereÃ ¢Ã¢â ¬Ã¢â ¢s market positioning in the upscale segment of the market (demographics), along with the consumer perception of superior service and an effective marketing campaign were the underlying reasons attributed to the foregoing. The preceding was demonstrated by the 80% occupancy rate at the acquired De Vere Cavendish hotel, which was purchased in 2001. The foregoing improvements in occupancy rates included the Village Hotels and Leisure Clubs which demonstrated occupancy rates of 80% compared to the industry average of 67.8%, with an increase, on average, of 5.1% in room rates to ÃâÃ £55.10 (De Vere.2004). Fixed assets totaled ÃâÃ £860.817m, against ÃâÃ £859.114m recorded in 2003, and investments accounted for ÃâÃ £10,243m compared with ÃâÃ £10.100m in 2003, for a total of ÃâÃ £871,060 for 2004 (ÃâÃ £869.214 for 2003). (De Vere, 2004) 2004 marked the year that Guinness Peat Plc tendered its offer for 25% of the companyÃ ¢Ã¢â ¬Ã¢â ¢s issued share capital which was soundly rejected by the shareholders of which just 0.55% voted in favor. (Bloomberg, 2004) An examination of the De VereÃ ¢Ã¢â ¬Ã¢â ¢s asset, earnings and stock price points to a company that had successfully implemented a new direction in its core business and positioned itself in the upscale hotel and leisure industry categories. After just four short years the company had earned a stellar reputation for quality and service and had grown to 21 De Vere hotels and 13 Village Hotels Leisure Clubs. Membership sales at Greens totaled 68,400 individuals and this division had turned profitable in 2003. GJ Greenall increased sales by 6.9% to ÃâÃ £28.8 and signed a new agreement with Bacardi International through 2012 with a higher margin clause. In all instances the company either met or exceeded its goals and returned shareholder confidence in achieving results in adverse market conditions marked by 2000 through 2003. Guinness PeatÃ ¢Ã¢â ¬Ã¢â ¢s Partial Cash Offer for 25% of De VereÃ ¢Ã¢â ¬Ã¢â ¢s issued share capital represents an occurrence where the nuances of the offer require close examination as to GuinnessÃ ¢Ã¢â ¬Ã¢â ¢ intent. Table 5 De Vere Group Plc Operating Highlights 2004 (De Vere Annual Report.2004) 2004 ÃâÃ £m 2003 ÃâÃ £m % change Turnover 321.8 312.2 +3.1% Operating Profit 57.6 54.7 +5.4% 2.3 Guinness Peat Plc 2.3.1 Background on the Company Although headquartered in London, the Guinness Peat Group Plc is one of New ZealandÃ ¢Ã¢â ¬Ã¢â ¢s premier companies, listed on the London, Australian and New Zealand stock exchanges. With a market capitalization of ÃâÃ £690.9 million the company has the financial resources to fund its investment strategies, which include holdings in financial services, manufacturing (thread and foods), building as well as raw materials (aluminum).(GPG, 2005) Its holdings are primarily in Europe as well as Australia and the companyÃ ¢Ã¢â ¬Ã¢â ¢s small but experienced core of executives operate with a hands on attitude. The company is known for its selective investment strategy which it makes mostly in public companies. The preceding is for the purpose of enhancing share value through the influence of shareholders as well as announcements and topics at the acquired companyÃ ¢Ã¢â ¬Ã¢â ¢s meetings. Sir Ron Brierley is kno wn as an Ã ¢Ã¢â ¬ÃÅ"active investorÃ ¢Ã¢â ¬Ã¢â ¢ and some tend to label Guinness Peat as a corporate raider, however, he explains his strategy as akin to an entrepreneur who Ã ¢Ã¢â ¬Ã âÃ ¢Ã¢â ¬Ã ¦stirs things up and adds value.Ã ¢Ã¢â ¬Ã (Sharechat,2001) Labeled as the Ã ¢Ã¢â ¬Ã âWarren Buffett of down underÃ ¢Ã¢â ¬Ã (Sharechat, 2001) Sir BrierleyÃ ¢Ã¢â ¬Ã¢â ¢s firm, Guinness Peat, has not performed nearly was well as his namesake whose yearly performance for 36 years has averaged 23.5%.(Sharechat, 2001) However, Guinness Peat has outperformed the capital markets wherever it has investment interests over the past nine years. When Sir Brierley took over the company in 1991 it totaled ÃâÃ £40 million ($60 million) in shareholder funds, a figure that now totals $1 billion. Sir Brierley has an active investor following of approximately 25,000 individuals who have stuck with his strategies almost from the beginning, thus providing the company wi th the clout it needs when the right deal presents itself. Lacking debt Guinness Peat is a sound investment company, further proven by Sir Brierley who takes no salary or feeÃ ¢Ã¢â ¬Ã¢â ¢s. Rather, Sir Brierley is the single largest shareholder in Guinness Peat and states that his interests are the same as the other shareholders, thus he strives to achieve gains on their behalf. In the past Guinness Peat tended to sit on its investments, engineering strategy and market changes to steer companies down more profitable paths. This hands on style has been somewhat modified under present circumstances as Sir Brierley has stated that when one notices that the companyÃ ¢Ã¢â ¬Ã¢â ¢s strategy is changing Ã ¢Ã¢â ¬Ã âÃ ¢Ã¢â ¬Ã ¦go sell your stock quick.Ã ¢Ã¢â ¬Ã (Sharechat,2001) He explains the preceding as protecting his investors and the company in that they minimize the downside, and by having investments spread across a number of industry sectors that Guinness is n ot over positioned in any one deal, thus if they do make a mistake the company will still be in a strong position. The preceding overview of Guinness Peat and Sir Brierley provides an understanding of the corporate philosophy and will be helpful in analyzing the De Vere Group offer. A company, as well as its leaderÃ ¢Ã¢â ¬Ã¢â ¢s reputation, is forged in past deals and how they ultimately faired in terms of investor and shareholder results. Prior to the De Vere offer, Guinness Peat reaped a large dose of negative publicity as well as a tarnished public and industry image. The company held a 16% interest in Inchcape, an international automobile dealer in the United Kingdom. The British press called Guinness a Ã ¢Ã¢â ¬ÃÅ"Ã ¢Ã¢â ¬Ã ¦troublemakerÃ ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã (Sharechat, 2001) when the company made demands that Inchcape be sold off and $343 million returned to shareholders. The furor in the press resulted from Guinness having stakes in other vehicle deale rs, namely Ryland, Perry and Quicks. It was argued that these companies could possibly benefit from the sell off of InchcapeÃ ¢Ã¢â ¬Ã¢â ¢s dealerships thus seemingly representing a conflict of interest. Table 6 Guinness Peat Group Plc Holdings 2002 (hemscottinvestment analysis, 2002) Company Sector Holding (%) Market Cap (ÃâÃ £) Price (p) Div Yield (%) PE Forecast EPS Growth % Discount To Net Assets (%) Coats Textiles 21.3 356 50.5 6 10 na 43 Dawson Intl. Clothing 29.9 43 42 na 420 na 20 De Vere Hotels 8.3 387 348 3.2 13 6 29 Gowrings Restaurants Car Dealers 11 10 108 4.6 8.5 41 35 Nationwide Accident Car Repair Services 20.7 22 83.5 4.1 14 na 47 Quicks Car Dealer 21 39 96.5 5.2 11 10 20 Ryland Car Dealer 26.3 27 92.5 6 10 na 2 Stylo Clothing Retail 12.6 18 29.5 na 17 na 72 Tops Estates Property 4.7 81 180 2 12 17 54 And the preceding example is not an isolated case. The company is known as a share activist in the United Kingdom by attempting to halt the Deutsche Borse merger (Sharechat, 2001). Although the company has a less than 1% stake in the London Stock Exchange, it flexes its muscles in a manner that exceeds its clout as well as welcome. The British financial circles are well aware of the companyÃ ¢Ã¢â ¬Ã¢â ¢s bloody battle with Coats Viyella. GuinnessÃ ¢Ã¢â ¬Ã¢â ¢ 12% holding in this company was leveraged to remove the board in favor of individuals more aligned with its thinking. The company also angered the British public by staging three raids on the family owned Young Brewery. Its 7.8% stake was utilized, as in other cases, to force management to either hear and or adopt some of its demands. These actions, while possibly in the interests of GuinnessÃ ¢Ã¢â ¬Ã¢â ¢ shareholders, has tarnished the companyÃ ¢Ã¢â ¬Ã¢â ¢s reputation and thus tends to set management as we ll as shareholders on their heels when Guinness becomes involved. The Guinness Peat Offer In March of 2004 Guinness Peat made a Ã ¢Ã¢â ¬Ã âpartial cash offer to acquire 28.5 million shares of De VereÃ ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã (Guinness Peat, 2004) based upon the following reasons as contained in GuinnessÃ ¢Ã¢â ¬Ã¢â ¢ Offer document: The cash offer entailed 415 pence per share, which at the time of the offer represented a premium on the stock closing of 22 March 2004 at 408 pence of 1.7%. As a 35% shareholder Guinness indicated that it would seek to utilize a more progressive and dynamic strategy to result in a release of the substantial value it indicated is hidden in the current corporate structure. The company stated that it would seek to accomplish the preceding by selling off the De Vere Hotel Division to yield the highest potential for its value which Guinness believed was occurring at that point in time. That Guinness Peat would oversee the preceding developments through its management. Guinness indicated that in order for the Offer to be successful that: Over 50% of the De Vere shareholders with voting rights need to approve the Offer And that the indicated acceptances would entail a minimum of 28.5 million shares The Guinness Partial Cash Offer stated that in the De Vere 2003 Annual Report that the company set this divisionÃ ¢Ã¢â ¬Ã¢â ¢s net asset value at around ÃâÃ £552 million. Guinness indicated that this figure included the liabilities of the De Vere Group headquarters which stood at ÃâÃ £26.2 million. Guinness indicated that this accounting methodology masked the asset value of the hotel group and represented an asset that could be sold off with the proceeds returned to shareholders. Guinness indicated in its Offer that the De Vere Hotel division was actually worth more as a private business in that the average price fetched by sale is 10.1 times the EV/EBITDA, as opposed to the market valuation of 8.7. The Offer also indicated that De Vere had under performed, in terms of share price appreciation, the hotel and leisure industry segment and that managementÃ ¢Ã¢â ¬Ã¢â ¢s strategies were not yielding maximum return on fixed assets. De Vere did not respond to the pre ceding Offer thus prompting Guinness Peat to extend a Ã ¢Ã¢â ¬Ã âFinal Partial Cash Offer to acquire 28.5 million shares of De Vere Group PlcÃ ¢Ã¢â ¬Ã on 8 June 2004. (Guinness Peat, 2004) This Ã ¢Ã¢â ¬Ã âFinal Partial OfferÃ ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã stated that: (Guinness Peat, 2004) De VereÃ ¢Ã¢â ¬Ã¢â ¢s Board record of maximizing shareholder value has not been borne out by its record. The De VereÃ ¢Ã¢â ¬Ã¢â ¢s Board has not disclosed a proper valuation of the De Vere Hotel division free of outside debt. The De Vere Hotel division has been seriously undervalued in terms of share price and that the present Board has not implemented corrective actions to address this shortcoming. And finally, that the De Vere Board refuses to address maximizing value for shareholders. This Ã ¢Ã¢â ¬Ã âFinal Partial OfferÃ ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã recommended the following corrective measures as the plan to correct the foregoing: (Guinness Peat, 2004) Dispose of the De Vere Hotel division at a price in excess of ÃâÃ £550 million (before transaction costs), to avail the company (De Vere) of the present low interest rate which would help to structure such a sale, to return a substantial portion of the proceeds from such a sale (De Vere Hotel division), to the company shareholders, to ensure that in the future the De Vere Board utilizes a shareholder beneficial approach to operations. Throughout the Partial Cash OfferÃ ¢Ã¢â ¬Ã¢â ¢s extended by Guinness Peat, the same issue was tackled, a sell off of the De Vere Hotels division which has been under reported as a result of the companys headquarters debt being assigned in that segment of the financial reports. Guinness stressed in its Final Partial Offer that it was not seeking control of De Vere, simply to release undervalued assets to the benefit of shareholders through clear fiscal reporting and advantages for sale that exist in the present market. Guinness increased its share price offer to 430 pence which represented a premium of 5.4% over the 22 March 2004 closing price of 408 pence. The Final Partial Cash Offer was also rejected by De Vere shareholders as just 0.55% replied to the affirmative. 2.3.4 Guinness Peat Offer Analysis GPGÃ ¢Ã¢â ¬Ã¢â ¢s (Guinness Peat) Partial Cash Offer was based on its interpretation of De VereÃ ¢Ã¢â ¬Ã¢â ¢s financial reports that indicated the De Vere Group h eadquarters debt of ÃâÃ £26.2 million is why the DivisionÃ ¢Ã¢â ¬Ã¢â ¢s asset valuation for its hotels was only ÃâÃ £550 million. Guinness proposed shifting this debt thus freeing up the conditions for sale in a post recession market where the potential bidding for these premium properties would be driven to their true market value. The other assumptions utilized by Guinness Peat in proceeding with such an offer entailed their analysis that competitor firms would be eager to both rid themselves of De Vere in their competitive sector, but also strengthen their own positions through the acquisition of premium performing properties. Guinness PeatÃ ¢Ã¢â ¬Ã¢â ¢s Partial Cash Offer did not address the manner in which the ÃâÃ £26.2 million in headquarters debt will be structured, as well as the fact that this debt would represent a burden on the remaining performing divisions as the percentage of debt to revenues would increase dramatically. Said change in the debt to earnings ratios would drive De VereÃ ¢Ã¢â ¬Ã¢â ¢s stock downwards under the reduced divisional format and further limit the companyÃ ¢Ã¢â ¬Ã¢â ¢s ability to fund acquisitions for existing divisions or new opportunities. The Guinness Partial Cash Offer also failed to address that the sell off of De VereÃ ¢Ã¢â ¬Ã¢â ¢s flagship brand name would erode the prestige of its remaining brands thus resulting in a further deterioration of their brand image and how this would impact upon the remaining divisionÃ ¢Ã¢â ¬Ã¢â ¢s ability to compete in a market which the company itself would have made stronger via a sale to key competitors. The Guinness Peat Partial Cash Offer also contained some striking advantages for GPG in that it would be able to gain control over this segment of De VereÃ ¢Ã¢â ¬Ã¢â ¢s assets and the dispensing of the sale proceeds thus regaining its Offer price plus profit in a relatively short span of time. The preceding, when coupled with the neg ative publicity that Guinness received in the British press for its handling of the Inchcape automotive dealership, Deutsche Borse merger with the London Stock Exchange, Coast Viyella boardroom blood bath and the three attacks on Young Brewery, created a climate of distrust on the ultimate motives of GPG. Guinness PeatÃ ¢Ã¢â ¬Ã¢â ¢s actions of 2004 could be gleaned from earlier resolutions to the De Vere Board in 11 January of 2001 when the company held its 10 percent stake. The following resolution was submitted to De Vere by Blake Nixon, the United Kingdom Executive Director for Guinness Peat. It proposed the following to be addressed at the upcoming annual meeting: (GPG, 2001) The return of up to ÃâÃ £50 million to shareholders via an off market tender offer for a total of up to 15% of the companyÃ ¢Ã¢â ¬Ã¢â ¢s issued capital at a price limit of ÃâÃ £3.00 a share, To spin off Village Leisure and Greens as a separate public company, Nixon stated that the Board of De Vere had not done enough to maximize share value. Ultimately, Guinness PeatÃ ¢Ã¢â ¬Ã¢â ¢s Partial Cash Offer did not impress De Vere shareholders in terms of its proposition or its share price offer. Further, the preceding broad operating and financial considerations were not addressed and presented a concern to those investors who had or would not have recovered their initial share price investments from the sale distribution plan offered by Guinness Peat. As indicated, the remaining entity would be a substantially reduced company and the debt to earnings ratio would further dilute the market share price. This end result would have provided De Vere shareholders with an immediate cash compensation, but left them with a weakened company in a strengthening market. Guinness PeatÃ ¢Ã¢â ¬Ã¢â ¢s Partial Cash Offer did not specify the distribution terms and leaves one to think that based upon past history that GPG would recoup all of its initial investment in De Vere as well as reap the proportionate share of cash from the De Vere Hotel division sale for a handsome profit. The short-term benefit of this proposal did not appeal to the majority of De Vere shareholders for these as well as other reasons. Chapter 3 Ã ¢Ã¢â ¬Ã¢â¬Å" Literature Review Stakeholders Rahman and Jorg (2003) state that the Ã ¢Ã¢â ¬Ã âÃ ¢Ã¢â ¬Ã ¦importance of the relationshipsÃ ¢Ã¢â ¬Ã ¦companies have with stakeholdersÃ ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã go beyond the historical understanding of this term. They bring into the stakeholder / company relationship the viewpoint that it is more than monetary, it also entails trust and a commitment to objectives that best serve the interest of the company and therefore its stakeholders as well. The word itself, stakeholder, was first utilized by Marion Doscher (Stewart et al, 1963) as described in a report to business subscribers. Since that time, the concept of a companyÃ ¢Ã¢â ¬Ã¢â ¢s stakeholders has evolved and become defined to mean those individuals and groups which the company has Ã ¢Ã¢â ¬Ã âÃ ¢Ã¢â ¬Ã ¦unfair non-contractual effects.Ã ¢Ã¢â ¬Ã (Kelly et al,1997) British Prime Minister Tony Blair said that Ã ¢Ã¢â ¬Ã âWe need to build a relationship of trust not just within a firm but within societyÃ ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã (Blair, 1996). TodayÃ ¢Ã¢â ¬Ã¢â ¢s understanding of stakeholders focuses on the relationship that companies have with this group. Rather than viewed as individuals and or groups to be managed, todayÃ ¢Ã¢â ¬Ã¢â ¢s corporate thinking see them as a Ã ¢Ã¢â ¬Ã âÃ ¢Ã¢â ¬Ã ¦network-based, relational and process-oriented view of company / stakeholder engagementÃ ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã (Rahman et al, 2003) Rahman and Jorg (2003) further expand upon the preceding by stating that the modern day relationship between the company and its stakeholders, is based upon Ã ¢Ã¢â ¬Ã âÃ ¢Ã¢â ¬Ã ¦ mutuality, interdependence and power.Ã ¢Ã¢â ¬Ã (Rahman et al, 2003) The competitive nature of todayÃ ¢Ã¢â ¬Ã¢â ¢s business environment has created a climate whereby corporations operate in multiple countries, thus making their actions, performance and behaviors visible to broad groups of individuals and institutions. Will iamson (1993) indicated that trust in business is actually a matter of calculation, based upon self-interest as well as consideration for others, as well as oneÃ ¢Ã¢â ¬Ã¢â ¢s own reputation. Rahman et al (2003) bring up the point that operating a company in the interest of stakeholders can be inviting trouble as differing groups compete for control and thus there would not be a clear indication of which group has priority. In the instance of the Guinness Peat Ã ¢Ã¢â ¬ÃÅ"Partial Cash OfferÃ ¢Ã¢â ¬Ã¢â ¢, Sternberg (1994) argues that operating a company in this manner Ã ¢Ã¢â ¬Ã âÃ ¢Ã¢â ¬Ã ¦provides no guidanceÃ ¢Ã¢â ¬Ã ¦as to how competing interests are to be ranked or reconciledÃ ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã (Sternberg, 1994) And while the word Ã ¢Ã¢â ¬ÃÅ"stakeholdersÃ ¢Ã¢â ¬Ã¢â ¢ refers to anyone that has a stake in the well being of a company, in the context of the Guinness Peat Offer for De Vere, what one is really referring to are shareholders, a s stakeholders do not identify those who actually put up funds for their Ã ¢Ã¢â ¬ÃÅ"stakeÃ ¢Ã¢â ¬Ã¢â ¢ in the companyÃ ¢Ã¢â ¬Ã¢â ¢s operations (Dunlap, 1996). Thus, in the context of this paper, stakeholders is a term that reminds business managers to be mindful of those groups and individuals who have a financial stake in the corporation. The preceding also means that those suppliers, employees and non-financial stakeholders also need to be considered in the context of business decisions and how these groups and individual will be affected by business decisions as well. (Rahman et al, 2003) Corporate Governance Shleifer and Vishny (1997) provide some clarity concerning what is corporate governance as they define it as Ã ¢Ã¢â ¬Ã âÃ ¢Ã¢â ¬Ã ¦the ways in which suppliers of finance to corporations assure themselves of getting a return on their investmentÃ ¢Ã¢â ¬Ã ¦Ã ¢Ã¢â ¬Ã (Shleifer et al, 1997). Rahman and Jorg (2003) state that corporate governance concerns itself with holding a balance between social and economic goals as well as between communal and individual goals. The framework (corporate governance) encourages the efficient use of resources and also requires the managing of these resources. Bavly (1999) furthers the preceding by stating that Ã ¢Ã¢â ¬Ã âJust as every social structure has its own accountability system, in the classic market economy a company is held responsible in the marketplace.Ã ¢Ã¢â ¬Ã (Bavly, 1999) He goes on to add that one of the obligations of corporate governance is providing information to enable the shareholders of a company to un derstand how the capital they have invested is and has been put to use, as well as the financial standing of the company in terms of these resources. Carriere et al, (2002) poi
Saturday, May 16, 2020
The Cyber Appellate Tribunal The Act provides for the establishment of the Cyber Appellate Tribunal. Its establishment, composition, Jurisdiction, powers, procedures are as follows: Establishment and Composition: Section 48 of the Act authorized the Central Government to establish, by notification, one or more Cyber Appellate Tribunal (herein after referred to as CAT). The Central Government should, in the same notification, specify the matters and places in relation to which the CAT may exercise jurisdiction. The CAT shall consist of a Chairperson and such number of other Members who shall be appointed by the Central Government. Qualification, term of office and other terms and conditions of service of Presiding Officer: A person to be appointed as a Chairperson of CAT should possess any of the following conditions11: (a) He is, or has been, or is qualified to be, a judge of a High Court; or (b) He is, has been a member of the Indian Legal Service and is holding or has held a post in Grade I of that service for at least three years. The term of office of the Chairperson is fixed at five years from the date on which he enters upon his office or until he attains the age of sixty-five years whichever is earlier12. The salary and allowances payable to and the other terms 11 Section 50 of the Act. 12 Section 51 of the Act. 30 and conditions of service including pension, gratuity and other retirement benefits of, the Chairperson of CAT shall be such as may be prescribed. ButShow MoreRelatedCyber Crime5881 Words Ã |Ã 24 PagesUniversity Of Dhaka [pic] Department Of Management Information Systems [pic] Assignment On Business Law Topic: Cyber Crime Prepared By : Subrata Halder ID NO : 05-005 Submitted To: Ashraful Alam Read MoreCybercrime and Its Impact in Bangladesh7186 Words Ã |Ã 29 Pagesii Preface Cyber and technology related crime is on the increase and current trends indicate that it will be a significant issue in Bangladesh. It has already been seen that a glomming threat becomes visible in the arena of information technology. The hacking of RAB website and e-mail threats of former prime minister are example for few of them. In contrast, cybercrime is becoming a threat to government itself. Due to lack ofÃ necessary legislation to tackle such type of crime, cyber criminals areRead MoreCyber Laws in India and their Implications1817 Words Ã |Ã 7 PagesCyber Laws in India and their Implications Contents Cyber space Ã¢â¬â Nature of threat 2 Growth of Internet user Population 3 The Legal Framework 4 The US and the UK Approaches for Data Protection and Privacy 4 The US 4 The UK 5 IndiaÃ¢â¬â¢s Legal Framework Meets Most Requirements 5 Indian IT Act 2000 5 Indian Copyright Act 5 Indian Penal Code 5 Indian Contract Act, 1872 5 IT Act of India 2000 6 Proposed Amendments to the IT Act 8 Other Government Measures 9 Cyber space Ã¢â¬â Nature of threat Read MoreCyber Laws and Cyber Crime3575 Words Ã |Ã 15 PagesIntroduction 2 3 Cyber crime 2 4 Classification of Cyber crime 2 5 Status of Cyber Crime 6 6 Cyber law 7 7 Cyber Law in India 8 8 Advantages of Cyber Law 9 9 General Suggestions and information 10 10 Suggestions for better security 10 11 Conclusion 11 12 Reference 12 Abstract: Cyber law and cyber crime is becoming an important issue forRead MoreCybercrime Law5688 Words Ã |Ã 23 PagesCyber crimes essay THE INFORMATION TECHNOLOGY ACT AMENDMENT OF 2008 Cyber law, in a general sense, has been envisaged as a term that encapsulates the legal issues related to the use of communicative, transactional, and distributive aspects of networked information devices and technologies. And the crimes against these issues are termed as cyber crime Cyber law and cyber crime Cyber crime spans not only state and national boundaries, but the international boundaries as well. At the Tenth UnitedRead MoreQ Mobile in Bangladesh5071 Words Ã |Ã 21 Pagesenacted by the legislature and interpreted by the higher courts. 1. Supreme Court 2. Special Courts 1. Labor Courts decide labor disputes. 2. Administrative Tribunals decide service disputes of public servants. 3. Income Tax Appellate Tribunals decide income tax disputes, custom and excise matters. VAT Appellate Tribunals decide disputes regarding custom and excise duties and VAT. 4. Court of Settlement decides disputes relating to abandoned properties. Tax System In Bangladesh VATRead MoreCompetition Law- Effective Tool for Good Corporate Governance in India13353 Words Ã |Ã 54 Pagesthe affairs of the company. For effective corporate governance, its policies need to be such that the directors of the company should not abuse their power and instead should understand their duties and responsibilities towards the company and should act in the best interests of the company in the broadest sense. Corporate Governance in India: Corporate governance concept emerged in India after the second half of 1996 due to economic liberalization and deregulation of industry and business. With the
Wednesday, May 6, 2020
Introduction: Africa faces many problems which boycott its transition from predominantly the frontier market to the emerging market sector. This essay will discuss the impact that terrorism and militancy have had on African progress, and, outline the successes and failures of the approaches that have been taken to combat this. Terrorism is still without a concrete definition however the UN Security Council uses Ã¢â¬Å"Criminal acts intended or calculated to provoke a state of terror in the general publicÃ¢â¬ (United Nations, 2015) as way to condemn terrorist acts. For the purpose of this essay we will use regional examples from Nigeria and Somalia to show a variety of situations rather than consider African terrorism as a whole. Additionally weÃ¢â¬ ¦show more contentÃ¢â¬ ¦This Act prohibits the financing of terrorism and the act itself along with placing obligation on financial institutions to report suspicious spending. Since then the countryÃ¢â¬â¢s criminal justice systems have been stren gthened along with numerous arrests having been made (Onuoha etal, 2011). NigeriaÃ¢â¬â¢s cooperation in Global affairs has also increased including collaborating with the U.S. in anti-terrorism exercises (U.S Department of State, 2013). The country has also made significant progress in regulating the financing of terrorism. A significant mile stone was crossed when Nigeria was taken off of the FATFÃ¢â¬â¢s list of countries subject to monitoring for money laundering and terrorist financing (U.S Department of State, 2013). These advances have had a positive effect on the stability of the country however there are many inadequacies that led some to refer to the act as a Ã¢â¬Å"Toothless BulldogÃ¢â¬ (Toyin, 2012). Major criticisms include the Act does not issue the protection of fundamental human rights to the terrorists in question (Onuoha etal, 2011). This is regressive at best in terms of human progress. As told by Dakas, C. 2012. p.1 Ã¢â¬Å"The temptation for governments and parliaments in countries suffering from terrorist action is to fight fire with fireÃ¢â¬ . He then continues Ã¢â¬Å"For a State to react in such a way would be to fall into the trap set by
Tuesday, May 5, 2020
Question: Discuss about the Role of Intercultural Communication Competence. Answer: Introduction The analysis in the report is based on the study of the business environment of Five Guys Burgers International and the expansion plan of the organization. Five Guys Burgers was established in the year 1986 in Arlington County, Virginia and the restaurant had extended its operations to five other locations in the Washington, D.C area. The company was founded by Jerry Murrell along with his wife and five sons. The restaurant chain started franchising its business operations from the year 2003 and this led to huge expansion of the chain. The restaurant had its operations in more than 300 locations within the year 2012 in United States of America (Fiveguys.co.uk 2017). The company operates in the locations both as company owned stores as well as franchisees. The company has been facing issues in the recent times regarding the expansion plans and adding items to the menu as well. The study in this report is based on the macro and micro environmental analysis of the company. The internal analysis of the company is done based on the Porters value chain model. The potential market analysis for the expansion of the company is done with the help of the 12 Cs framework. Further the potential market for the expansion of the company will be selected based on this analysis (Forbes.com 2017). As discussed by Joslin, Priebsch and Singleton (2014), the macro-environment analysis involves six forces including demographic forces, political forces, economic forces, socio-cultural forces, ecological forces and technological forces. The demographic force of the macro-environmental analysis is related to the people of USA. The food habits of the people of USA is firmly related to burgers. The study of the people staying in the country where the company operates is important to decide the growth of the market. The growth in the population of the world is another factor that affects all the industries whether it is related to garments, food or any other industry. The global economic crisis is a factor that has affected the food industry as well. The population has been growing in the recent years in the developing countries like Japan, China, India (Argyres and Bercovitz 2015). This has opened many opportunities for growth for the companies and expanding their international operati ons. The opportunities of business have raised also due to the changing society and the needs of the society is also changing constantly. The invention of new technologies in the market is changing the business environment constantly. This has provided opportunities for the development of the business as well (Paul and Roy 2014). However, the rules and regulations regarding the foreign direct investment in many countries have become strict and this can act as a negative factor for the expansion plans of the company (Dima, Grabara and Modrak 2014). The political factors related to the business environment is another way by which the business operations of the country are affected. The political environment of the business needs to be stable so that the organization can control its operations easily and also make plans for expansion. The growth of the developing countries with reference to the stable economy of the United States of America helps to balance the economy and the prices o f the goods and services can also be controlled (Segal, Shaliastovich and Yaron 2015). Analysis of the micro environment of the food industry According to Eze, Odigbo and Ufot (2015), the micro-environment of the economy is affected by six factors including customers of the company, the employees working in the organization, the competitors of the company, the suppliers of the company and the channels of distribution of the company, the investors of the company and the media link of the company. The food industry is an ever-changing industry and the demands and needs of the people also change continuously. The food habits of the people of USA where the restaurant is based is perfectly suitable for the offerings and the products of the restaurant. The expansion of the business of the restaurant based on franchisees is an inexpensive and fruitful idea for the business of the restaurant (Dutta et al. 2014). The restaurant however has to face stiff competition from the other restaurants offering the same cuisine. The competition of this restaurant in the United States can be, McDonalds, Starbucks, Subway, Burger King, Wendys, Taco Bell, Dunkin Donuts and many more. The restaurant has to face competition from these companies as the product range of these restaurants is more as compared to that of Five Guys Burgers. The introduction of technology in the food market has changed the scenario in the recent years. The reach of the restaurants has also increased resulting in the increase of sales and profitability. The promotional costs of the company have also decreased in the recent years with the help of social media marketing. This has led to the expansion opportunities of the company in the international markets as well (Eberlein et al. 2014). The suppliers of the company act as an important in the production process of the food products. The restaurant therefore should aim at outsourcing the supplier activities and using the franchisee process to expand their operations. The online growth of the food market has facilitated the interaction with the customers and thereby trying to understand their needs and desires from the organization (Wren and Rehm 2013). Analysis of the internal business of Five Guys Burgers by Porters Value Chain As discussed by Kaplinsky (2013), the Porters Value Chain analysis is used for the internal analysis of the business. The activities related to the business are identified and the advantage of the business over the competition in the market is analysed with the help of this model. The business analysis of Five Guys Burgers is done by the Porters Value Chain Model. The analysis based on the Porters Value Chain model is explained as follows, Inbound logistics The inbound logistics of Five Guys Burgers mainly refers to the selection of the best quality ingredients required for the burgers. The best quality American cheese is used in the restaurant. The buns that are used by the restaurant are much sweeter as compared to the normal buns available in the market. Roasted peanuts are offered in the restaurants at most of the locations of the restaurant. Operations Five Guys Burgers operates in the United States and Canada. The company operates both the self-owned and franchisees in these areas. The franchised restaurants of Five Guys Burgers are owned by independent owners. The company operates around 300 franchised branches in Canada and United States. Outbound logistics The products of the Five Guys Burgers are sold directly from the self-owned restaurants or the franchised restaurants. The restaurant does not have any intermediaries in the process (Eze, Odigbo and Ufot 2015). Sales and marketing The Five Guys Burgers are famous for their concept of making the better burger. The restaurant had flourished with the help of positive responses of the customers about the food. The promotional activities are performed in the recent times with the help of digital marketing techniques. The restaurant also provides delivery services through online ordering. Service The restaurant mainly aims at building passionate and loyal customers. The menu of the restaurant has been similar since its inception, with some minor changes. The founders of the restaurant have the vision of keeping the menu only about fries and burgers. Infrastructure The restaurants of the Five Guys Burgers are mainly decorated red and white check boxes and there is a single counter present for the purchase as well as the pick-up of the food as well. The restaurants consist of cork boards mounted on the walls for the differently abled customers. The positions of the employees are depicted with the help of uniforms. The employees who wear red t-shirts and the managers wear white or grey polo or t-shirts (Yoder, Visich and Rustambekov 2016). Human Resource Management The employees of the restaurant are committed towards providing the best service to the customers according to the vision of the founders. They strive to provide the best handmade fries and burgers to the customers. The restaurant is known to build a strong customer base with a huge number of loyal customers. Technology development The restaurant has upgraded its technologies with the technological advancement in the business environment. The burgers and the fries are hand-made, however, the restaurant has opened its online platform and they take online orders as well (Grguri Rashiti et al. 2017). Procurement The raw materials used for the burgers and the French fries are procured fresh from the market. The burger buns are freshly baked and are not refrigerated. These features of the restaurant help in building the immense customer loyalty. SWOT Analysis of the company Strengths Weaknesses The restaurant has strong focus towards the products that they serve to the customers. The restaurant is operated by the family of Murrells and the menu has remained same since the opening of the restaurant. The restaurant has been profitable just after few years of opening and has been going strong. The restaurant has a strong base of loyal customers, who are passionate about their food choice. The restaurant has been visited by famous personalities like Barrack Obama and this has given the push to the sales and profitability of the restaurant. The freshly baked buns and the hand- made French fries are the speciality of the restaurant. The menu of the restaurant is limited to only burgers and fries and the founders of the restaurant aim at making their burgers better than that of the restaurants serving the same cuisine. The restaurant faced major problems in the beginning due to the unfair means that were undertaken by the employees. The founders have been pushed time and again by the franchise owners at the different locations to increase the items in the menu. The restaurant faced a failure in the coffee area and had to pull back the product shortly after the launch. The burgers of the restaurant were labelled as unhealthy by the Mens Health magazine (Gobinda Goswami and Haider 2014). Opportunities Threats The restaurant has been growing fast since its inception and had established around 1039 stores in United States of America and Canada as well. The restaurant has the plans to open around 1500 more stores. The decision of the company to give franchisee of their restaurants proved to be the best decision of the company. The restaurant has been successful in their overseas operations as well. The restaurant can plan for the expansion with the help of the franchise in the other countries. This will need less investment from the part of the restaurant chain and thereby the profits will also increase. The menu of the restaurant chain is a problem for the sales and profit of the restaurants. The restaurant chain is facing a lot of competition from the other chains of restaurant in the area. The competition of Five Guys Burgers in United States comprises of fast food chains like McDonalds, Starbucks, and many more. The increase in the competition in the market has also increased the pressure of the franchise over the founders to increase their menu items. The restaurant chain may have to face the same problems in their overseas operations as well (Hanssens et al. 2014). Analysis of the potential markets using 12 Cs Framework Country India is a country with diverse cultures and many types of people. India shares its border with Pakistan, Bangladesh and other countries. India holds the second largest rank in the world after China in terms of population, which holds the first rank. Japan on the other hand is a country which is well organized and is the hub of technology. Singapore is a small country of Asia; however, the country is strong in terms of economic conditions. Currency Chinas currency is Renminbi, or Chinese Yuan. The currency of India is Rupees, currency of Japan is Japanese yen and the currency of Singapore is Dollar. The exchange rate of the Indian Rupees is 64.78 rupees to 1 dollar. On the other hand, 112.08 Japanese Yen is equal to 1 dollar, 6.62 Chinese Yuan is equal to 1 dollar and the exchange rate of 1.35 Singapore dollar is equal to 1 US Dollar. This shows that the Singapore dollar is a strong currency as compared to the others (Kiszko et al. 2014). Culture The culture of India is diverse as there many different states with different types of people. The Chinese and the Japanese culture is similar and the religious beliefs in these countries is not quite strong. Singapore is a society which is cosmopolitan in nature and the people belonging to different races live together. The cultures of the people of this country are diverse in nature. Control China is country where the rule is under one party. The rule in India is under more than two parties. In case of Japan and Singapore the control of the political situation is under multiple parties (Huang and Sarigll 2014). Concentration The concentration of the people in China is mainly in the urban areas, whereas the population of India is scattered in the urban and the rural areas as well. The population of Japan and Singapore is also concentrated in the urban and the semi urban parts of the countries. Commitment The investment related policies of India and China are suitable for foreign investors. Japan is also a country which attracts the foreign investors and Singapore has a strong economy having the ability to attract investors (Liu et al. 2017). Communication The mode of communication in India and China is through the internet. Japan and Singapore are also technologically advanced and the mode of communication in these countries is fast and convenient. Choices The food habits of the people of India are diverse as the cultures are also different. Singapore is also a country with diverse cultures and the taste of the people are also different. On the other hand, in the countries like China and Japan people follow similar culture and the food habits are also similar. There are many local and international restaurant chains already successfully operating in these countries (Ihtiyar and Ahmad 2015). Channels The distribution and the facilities related to the logistics in Japan, China and Singapore are world-class. On the other hand, the geographical position of India helps in the import and export facilities in this country. The climatic condition of India also helps in keeping the country accessible throughout the year. Contractual The corporate system in India is much fairer as compared to that of China. The Japanese corporate is also known to facilitate trade and foreign investment as well. The laws of the Singapore government help in the establishment of any new business in the country (Noland, Robinson and Moran 2016). Paying capacity The paying capacity of the people of China has increased in the recent years. Japan being the technological hub of Asia also shows huge payment capacity. The strong economy of Singapore facilitates the paying capability of the country. The paying capacity of the people of India is high as the food market mainly consists of the youth of the country. Caveats The competition in the Chinese market is high due to the presence of local restaurants and same is the case for Japan as well. The market in India and Singapore is however much more diverse and the growth opportunities for the restaurant chain is also high as compared to the other countries (Joslin, Priebsch and Singleton 2014). Recommended approach of marketing in the target area The country that is chosen as the target market for Five Guys Restaurant chain is India. The diverse culture of India and the different choices of the food will facilitate the sales and the profit of the restaurant. The population of this country is the second highest as compared to China and this is another factor that is profitable for the restaurant. The laws related to the corporate competition is fair in this country and this will help Five Guys Burgers to establish and explore the opportunities. The restaurant chain needs to enter the market with the help of the franchisee process, thereby facilitating the profitability of the company and expansion at the same time (Kaplinsky 2013). The founders should think of sending some of the experienced employees from the restaurants that are already operating in the United States and Canada, so that they can analyse the situation in the new market segment. The marketing mix of the Five Guys Burgers restaurant chain will consist of the 4 Ps of marketing which includes, Product, Price, Place and Promotion (Bahadir, Bharadwaj and Srivastava 2015). The Products of the restaurant will include the Burgers which will be freshly baked, sandwiches, fries, the breakfast menu, milkshakes and the drinks. The Price of the burgers will be fixed at INR 250, the French fries will cost around INR 150, the milkshakes will range from INR 150 to INR 300. The Price of the drinks will range from INR 150 to INR 300. The reasonable pricing of the products will help the restaurant chain to counter the competition in the market, which are already present (Bizjournals.com 2017). The restaurant chains which can give stiff competition to the Five Guys Burgers are McDonalds, Starbucks, Subway, Burger King and many more. The Place where the restaurant chain can plan to open the first franchisee is Mumbai, which is considered to be the financial capital of India. The restaurant chain can then further increase its operations in the other metro cities of the country. The Promotions of the restaurant can be performed with the help of digital marketing techni ques and the social media as well (Khan 2014). Conclusion The report depicts the analysis of the market of Five Guys Burgers with the help of Porters Value chain analysis. The internal analysis of the company is done based on the SWOT model. Further, the suitable target market for the restaurant is analysed based on the analysis of the countries with the help of the 12 Cs framework. The target market that is decided with the help of this analysis is India, as the culture of the country is diverse and the choices of the people of this country is also variable. The report can be concluded by stating that the Five Guys Burger restaurant chain has many opportunities of growth in the market. India is a fruitful target market for the restaurant and can provide huge levels of profitability. References Argyres, N. and Bercovitz, J., 2015. Franchisee associations as sources of bargaining power? Some evidence.Journal of Economics Management Strategy,24(4), pp.811-832. Bahadir, S.C., Bharadwaj, S.G. and Srivastava, R.K., 2015. Marketing mix and brand sales in global markets: Examining the contingent role of country-market characteristics.Journal of International Business Studies,46(5), pp.596-619. Bizjournals.com (2017).Cite a Website - Cite This For Me. [online] Bizjournals.com. Available at: https://www.bizjournals.com/washington/morning_call/2016/03/five-guys-making-a-steady-rise-overseas.html [Accessed 21 Nov. 2017]. Dima, I.C., Grabara, J. and Modrak, V., 2014. Sustainable logistics and business competitiveness.International Letters of Social and Humanistic Sciences, 15 (2), pp.148-156. Dutta, K., Parsa, H.G., Parsa, R.A. and Bujisic, M., 2014. Change in consumer patronage and willingness to pay at different levels of service attributes in restaurants: A study in India.Journal of Quality Assurance in Hospitality Tourism,15(2), pp.149-174. Eberlein, B., Abbott, K.W., Black, J., Meidinger, E. and Wood, S., 2014. Transnational business governance interactions: Conceptualization and framework for analysis.Regulation Governance,8(1), pp.1-21. Eze, F.J., Odigbo, B.E. and Ufot, J.A., 2015. The correlation between business location and consumers patronage: Implications for business policy decisions.British Journal of Economics, Management Trade,8(4), pp.294-304. Fiveguys.co.uk (2017).Five Guys Burgers and Fries. [online] Fiveguys.co.uk. Available at: https://www.fiveguys.co.uk/about#tab-family [Accessed 21 Nov. 2017]. Forbes.com (2017).Forbes Welcome. [online] Forbes.com. Available at: https://www.forbes.com/forbes/2012/0806/restaurant-chefs-12-five-guys-jerry-murrell-all-in-the-family.html [Accessed 21 Nov. 2017]. Grguri?Rashiti, S., Ramadani, V., Abazi?Alili, H., Dana, L.P. and Ratten, V., 2017. ICT, innovation and firm performance: the transition economies context.Thunderbird International Business Review,59(1), pp.93-102. Gobinda Goswami, G. and Haider, S., 2014. Does political risk deter FDI inflow? An analytical approach using panel data and factor analysis.Journal of Economic Studies,41(2), pp.233-252. Hanssens, D.M., Pauwels, K.H., Srinivasan, S., Vanhuele, M. and Yildirim, G., 2014. Consumer attitude metrics for guiding marketing mix decisions.Marketing Science,33(4), pp.534-550. Huang, R. and Sarigll, E., 2014. How brand awareness relates to market outcome, brand equity, and the marketing mix. InFashion Branding and Consumer Behaviors(pp. 113-132). Springer New York. Ihtiyar, A. and Ahmad, F.S., 2015. The role of intercultural communication competence on service reliability and customer satisfaction.Journal of Economic and Social Studies,5(1), p.145. 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Saturday, April 18, 2020
The medium of photography in the post World War I period was almost too deliciously convenient a vehicle for certain proponents of the Dadaists and the Surrealists. Cameras had been, since their invention, been shrinking to a manageable and portable size. The newly graspable medium offered these iconoclastic visionaries a range of possibilities for creating art that were available in no other way.Advertising We will write a custom essay sample on The Exhibit Twilight Visions at the International Center of Photography specifically for you for only $16.05 $11/page Learn More Through photography, the Dadaists could freely exercise the randomness, transgressiveness, immediacy, and populist tendencies they espoused. The Surrealists could snatch from around them scenes of impossibility and disturbing wonder, while showing bodies and settings with stark reality. Is it any wonder, then, that photography, Paris, Surrealism, and Dadaism are terms which go together ? The ability of photography to capture scenes of the moment allowed for an uncompromising observation of the world as it was, with all its warts, and was thus very appealing to a group which gloried in calling a spade a spade. After all, in the words of Tristan Tzara,Ã¢â¬Å"beauty is deadÃ¢â¬ (Tzara 249). Photography could catch the unwary subject in the midst of petty deception and hypocrisy. A photographer could make art from the flotsam and jetsam of the streets, whether human or object. A photograph was almost like performance art, involving the subject and the artist in an ephemeral, spontaneous, one-time-only event, very much in line with TzaraÃ¢â¬â¢s thinking (Tzara 253). Additionally, photography avoided entirely the hated tyranny of the art academy (Tzara 250). Further, the cumbersome process of using models, undergoing days or weeks of sittings, was avoidable when using photography. Rather than requiring a studio and years of training in drafting and painting, pho tography could be undertaken with only a modest closet for atelier. Additionally, in that less litigious age did not even require the consent of the subject to create a portrait. Furthermore, by placing the relatively inexpensive means of production of art in the hands of almost everyone, photography was enormously egalitarian and could theoretically be adopted by the masses for their own artistic expression, which was a goal of Dadaism (Darwent). What a perfect fit with the philosophy of the Dadaists! At the same time, photography had the enormous advantage that pictures could be modified from their recording of strict reality. They could, for example, be altered by changing lenses or using mirrors, as in Distortions (1933-1934) by Andre Kertesz, a Hungarian born expatriate who made Paris his home (Andre Kertesz). Photographs may also be modified chemically during processing, by changing the exposure or by retouching, to create entirely fantastic and appealingly dreamlike effect s.Advertising Looking for essay on art and design? Let's see if we can help you! Get your first paper with 15% OFF Learn More Entirely surreal images could be produced out of a darkroom, even at the hands of a person who had no drafting or painting skills . Such dreamlike effects were much valued by the Surrealists. Andre Breton wonders in his Surrealist Manifesto whether dreams are not equal in significance to waking life (Breton 434-437). He also has great respect for madness, and for hallucinations. In fact he regards hallucinations as pleasant enough to seduce the madman to remain in that condition (Breton 433). All these states of being can distort perception in the same way that a distorted photograph modifies reality. How appealing it must have been to know that one could print on paper the contents of oneÃ¢â¬â¢s dreams, as Breton could readily have accomplished with his simple but striking personal dream image of a man being cut in two by a window (Breton 436-437). The exhibit Twilight Visions at the International Center of Photography shows a range of photos from the practitioners of this medium in the 1920Ã¢â¬â¢s and 30Ã¢â¬â¢s. One notable example, Brassai, the nom de shutter of Hungarian born Gyula Halasz, specialized in images of a very anti-establishment cast of Ã¢â¬Å"prostitutes, pimps, madams, transvestites, apaches, and assorted cold-eyed pleasure seekersÃ¢â¬ (Brassai). BrassaiÃ¢â¬â¢s photo of the Angry Couple at the Bal Musette (1932), suspends the quarreling and not terribly elegant couple in suspended animation between moments of blame and insult. The unsparing picture certainly exemplifies the Dadaist view of Tristan Tzara in his Dada Manifesto, 1918; demonstrating Ã¢â¬Å"no pityÃ¢â¬ (Tzara). This depressing but basically realistic photo contrasts nicely with another Brassai, Bal Musette (1932) that combines the low-life grittiness of two bored prostitutes (or at least ladies of easy virtue) hugging a cheerfu l young man, with the hallucinatory surprise of finding in the mirror the image of a much older man and his companions. It is almost as if the viewer were seeing the young manÃ¢â¬â¢s dissolute future. Another piece, Girl Playing Snooker (1933), possesses all the dignity of an odalisque or any portrait of John Singer Sargent, but was of course snapped in a dark bistro of an undoubted prostitute. BrassaiÃ¢â¬â¢s gaze, like that of the young woman in the photo, is Ã¢â¬Å"straightforward as a hammerÃ¢â¬ (Brassai). This portrait of a nameless pool hustler delivers a Dadaist poke in the eye of traditional formal portraiture. The can-can dancers move blurrily in Ilse BingÃ¢â¬â¢s picture, French Cancan Dancers, Moulin Rouge, Paris (1931). Bing was unusual among this group of photographers, In that she had actually had some art and design-related training (Ilse Bing Biography).Advertising We will write a custom essay sample on The Exhibit Twilight Visions at the International Ce nter of Photography specifically for you for only $16.05 $11/page Learn More In spite of the blurring of this photo, it is a vivid image, and it is interesting to compare this with the many images of the demi-monde of the dance hall from the Impressionists. No color is in the photo, of course, and we are able to see the faces full on, unlike many backstage views by the previous generation of artists. How odd it is to confirm that the Impressionists actually were accurate in portraying the cancan performers as entirely composed, disinterested and almost expressionless. The word jaded might have been invented for these faces. Perhaps, as Breton suggests, for these women, Ã¢â¬Å"existence is elsewhereÃ¢â¬ (Breton 439). Breton would probably have encouraged these dancers to absent themselves as much as they could from the real world, since he affirmed that Surrealism was such a potent way of dealing with daily problems (Breton). Dadaism and Surrealism embr aced photography with enthusiasm, and created some remarkable works in the medium. They recorded the realities of street life and the underclass, and their dreams and nightmares as well. They used all the unique features of the medium to look at grit and turn it into fantasy. Bibliography Ã¢â¬Å"Andre KerteszÃ¢â¬Å", 2010. Explore Photography. Web. Brassai, 2010. Web. Breton, Andre. Ã¢â¬Å"The First Manifesto of Surrealism.Ã¢â¬ Art in Theory: 1900-1999: An Anthology of Changing Ideas. Ed. Charles, and Woodll, Paiul Harrison. Oxford: Blackwell, 432-439.Advertising Looking for essay on art and design? Let's see if we can help you! Get your first paper with 15% OFF Learn More Darwent, Charles. Well-chosen works show how De Stijl Ã¢â¬â Ã¢â¬ËThe StyleÃ¢â¬â¢ Ã¢â¬â movement led to a revolution in European art that still resonates today: Van Doesburg the International Avant-Garde, Tate Modern, London. 2010. Web. Ã¢â¬Å"Ilse Bing Biography.Ã¢â¬ 2010. Victoria and Albert Museum. Web. Tzara, Tristan. Ã¢â¬Å"Dada Manifesto.Ã¢â¬ Art in Theory: 1900-1999: An Anthology of Changing Ideas. Ed. Charles, and Wood, Paul Harrison. Oxford: Blackwell, 248-253. Footnotes Tzara expresses it thus: Ã¢â¬Å"Dada: absolute and unquestionable faith in every god that is the immediate product of spontaneityÃ¢â¬ (Tzara). Along with overturning everything that constituted order, the Dadaists believed that art had the power to uplift the oppressed and demoralized, and to accomplish this the art had to be accessible to them (Darwent). Kertesz certainly had little professional art training (Andre Kertesz). Breton contends of Surrealism that Ã¢â¬Å"It tends to ruin, on ce and for all, all other psychic mechanisms and to substitute itself for them in solving all the principal problems of lifeÃ¢â¬ (Breton). This essay on The Exhibit Twilight Visions at the International Center of Photography was written and submitted by user Organa to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.
Saturday, March 14, 2020
Writting The Satire Example Writting The Satire Ã¢â¬â Coursework Example The Ambitious Increase in Missed H.O.R.S.E shots The reports from a local public basketball court on Monday indicated an increasing trend of missed shots of two young H.O.R.S.E young players. Earlier sources reported multiple dramatic three-pointer misses from shorter distances. The misses from short, obvious distances points at lack of talent in the field of play hence, the young men should relocate to different sports. The missed shots looked funny according to the multiple fans that sacrificed their precise time to come and witness the match. The humiliation became evident on the faces of fans who could only dream about victory for their team.Despite the humiliating misses, the players stepped further back on the court and took four consecutive turns launching half court shots. Unfortunately, all the four shots went astray as it is the normal case in the playersÃ¢â¬â¢ profiles. The shots indicated the playersÃ¢â¬â¢ perfection in the misses with the ball bouncing back the backb oard without even touching the rim. With the negative reports, it is clear that any professional coach should not accord a slot for them in their teams unless the team objects to lose. Every fan devoted to the team shifted mindset from wishing the team success to anticipating loss that they became sure about.The young players are a symbol of poor performance hence their inclusion in a team is a direct booking to lose a basketball competition. Just like other star players, the two players called out Swish prior to a number of their shots. A recorded instance is when trying to hit an impossible one hundred-turnaround fade away from the baseline (The Onion editors 1). The two players are best and at their pick only during individual shows when there are no opponents, fantasy basketball suits them most and not a reality show. At press time, one of the wasteful players confidently walked behind the basket for an unsuccessful attempt at striking the ball over the backboard. The futile sho ts are a usual practice and art associated with the young players, and every fan anticipates it every time they attempt on a shot.The Onion editors.Ã¢â¬ Missed H.O.R.S.E Shots Getting Increasingly Ambitious.Ã¢â¬ The Onion Newspaper 16 Feb 2015. Print.