7/31/2019 GMBAQuestionsConRailCSX A
1/1
The Acquisition of Consolidated Rail Corporation (A)
Instructions and Questions
Reports must be sent electronically to [email protected] in Word,
PowerPoint, or PDF formatat the latest by 8:30am on the day in
which the case discussion is due. The report should be no
more than 3 pages long in Word format or 4 PowerPoint slides.
Excel tables, figures, graphsetc. that support the analysis can be
added without limit. Although one group of students willbe selected
to present their work on the case, all students are expected to
contribute to thediscussion (see grading). WARNING: copying and/or
plagiarism from any source withoutacknowledgement are not tolerated
and are penalized with a failing grade.
Please name your files as Group#_ where # stands for your group
number and
is the name of the case. For example if you are delivering a
.pdf file from group 5and the report concerns the ACME case, name
your file Group5_ACME.pdf.
Case Questions (A)
1. Why does CSX want to buy Conrail? How much should CSX be
willing to pay for it?2. Analyze the structure of CSX's offer for
Conrail
a) Why did CSX make a two-tiered offer? What effect does this
structure have on thetransaction?
b) What are the economic rationales for and the takeover
implications of the various provisionsin the merger agreement (i.e.
no-talk clause, lock-up options, break-up fee, and poison pill
shareholder rights plan)?
3. As a Conrail shareholder, would you tender your shares to CSX
at $92.50 in the first-stage offer?
