Ford Case

9-201-079 REV: MARCH 28, 2002 ANDRÉ F. PEROLD cross aim Companys Value sweetening Plan (A) On April 14, 2000, pass over Motor Co. inform a distributeholder Value Enhancement Plan (VEP) to significantly recapitalize the unanimouss ownership structure. pass over had accumulated $23 gazillion in notes reserves, close to the keep companys largest ever cash in position and significant relative to hybridisations $57 jillion equity market capitalization. Under the VEP, Ford would return as much as $10 billion of this cash to per centumholders. In exchange for each share currently held, the syllabus would spotlight stockholders one innovative-made share plus the choice of receiving $20 either in cash or additional new Ford common shares. Ford also announced that it would penetrate ownership of its Visteon Corp. parts unit to shareholders. Fords share price had performed poorly over the previous year (Exhibit 1), and the end pull a positive reaction from analysts who had been urging the company for months to distribute cash to stockholders. Some hailed the VEP as the boldest step tho by Ford Chairman William Clay Ford jr. and Chief Executive officer Jacques Nasser to convince investors that they were undervaluing the worlds No. 2 automaker. However, the plan raised a subdue of questions for investors.

Why was Ford proposing this act instead of a tralatitious share repurchase or a cash dividend? How did the interests of the Ford family factor into this decision, and what did the transaction need about the future battle of the family in the company? Why was F ord distributing such a significant amount o! f cash at this particular focus in time? Did the distribution symbol a change in the companys appetite for making acquisitions or future capital expenditures? If shareholders collectively elected to receive pocket-sized than $10 billion in cash, how would Ford distribute the go along cash? Ford Motor Company Headquartered in Dearborn, Michigan, Ford Motor Company was the worlds largest...If you want to suck up a full essay, order it on our website: OrderCustomPaper.com

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