The Takeover Targets Research Report

The Takeover Targets Research Report

To see the complete file: The Takeover Targets Research Report.pdf

The Takeover Targets Research Report

Targets: Starlight PLC, Mario Ferrino, Coffee Ground PLC

Introduction

This report is especially for Bon Appetit PLC to consider to takeover target’s analyses. It will show the three companies’ turnover in recent years and their share prices on the marketing. This report will also show the debt’s ratio, their background, and their costumers’ valuation. We should estimate these companies’ future which can feed Bon Appetit PLC Group’s need.

Mission Target

• To increase Bon Appetit’s profits
• To enhance Bon Appetit’s image
• To buy a company which will continue to grow and contribute the group’s success.
• To buy a company which will not take up too much of the present management’s time and energy.

Backgrounds and Analyses of three companies

Starlight PLC (London, UK):
• Founded: 6 years ago.
• Type of business: Ground floor restaurant + cabaret nightclub below ground or first floor.
• Ownership: Joachim and Theresa Lopez (Brazilian) – 100% voting share.
• Plans: to create a national network with an annual turnover in excess of 100 million Euros.

Mario Ferrino (Genoa, Italy):
• Founded: 35 years ago.
• Type of business: Delicatessen selling wide range of luxury food and drinks.
• Ownership: Mario Ferrino and his brother Marcello and family members.
(Family Companies)
• Plans: Mario and Marcello old (over 70). They want to retire. Relatives always arguing. No one keen to take over.

Coffee Ground PLC (London, UK):
• Founded: 12 years ago. First outlet in Brighton, seaside town.
• Type of business: Coffee shop serving drinks (mainly coffee) and food
• Ownership: 65% of voting shares: small shareholders + big institutions, banks, insurance company’s pension funds, etc.
(complicate)
• Plans: want to open new outlets next year in Italy or Spain.
• Mainly customers: young and medium age people.


Findings

Starlight PLC:
Risk point: ★★★★☆
• Although Starlight plc’s annual turnover is rising, but it doesn’t have much pre-fax profits. And its debt ratio is too high (72%).
• It cannot grow at their present rate without setting up a more professional management structure.
• Although its customers are all aged and service is good and full of energy, but all nationalities are one of reasons that is hard to control the qualifications and all restaurants are different type of style.
• It has already copycat cabaret clubs have started up in the north of England.
• Its cost is rising and has already reflected on the prices.
• Because the company is growing up and make the money, we want to takeover them that we have to pay more money for them. In my opinion, this is not a good deal and has highly risky. And we must invest in more people and time to take it over.


Mario Ferrino:
Risk point: ★★☆☆☆
• The company has a long history and well-known brand in food industry; Mario’s avocado and bacon sandwich.
• They have loyal customers.
• Good turnover and pre-tax profits (about £ 2.5millions) and Medium debt ratio: 44%
• Although the share price has smoothly declined, but it still has competitive on dishes market
• Simple ownership: its voted 100% by their family.
• The Major operator, Mario and Marcello are old (over 70), they want to retire. Relatives always arguing. No one keen to take over. In my opinion, it is a very good chance to takeover the company without huge mounts of money. And it has only lack of management in business. I believe that Bon Appetit PLC Group have good qualifications to reorganize this company.

Coffee Ground PLC:
Risk point: ★★★☆☆
• The company has fabulous turnover but its share price sharply decline in recent 12 months. It shows they have extremely tough rival like Starbuck, and it also shows their customers cannot afford their price so they had already decided to decline the prices.
• They have good debt ratio: 32% and mainly customers’ age (18~32).
• Their product is mainly focus on health and low-fat coffee and chocolates.
• With the pressure of the tough rival’s competition, their plan has already focused on the overseas markets. They want to open new outlets next year in Italy or Spain.
• So, the company’s future is uncertain future. This doesn’t fit Bon Appetit PLC Group’s need.

Conclusion

As the result shows, the most suitable target is Mario Ferrino. We don’t have to pay a lot of money to takeover that, and we also have spaces to negotiate the price with them. Because the major operators, Mario and Marcello, are old and they want to retire. And no one keen to take over. Furthermore, it has only lack of management in business. I believe that Bon Appetit PLC Group have good qualifications to reorganize this company.

Recommendations

Bon Appetit PLC Group is a chain of restaurants in the UK offering top class cuisine. It has well organized in business management and food industry.
There will be possible benefits under the list:
1. If this merger will be success, we can make varied to two types of restaurants, with mixed Italian foods and England foods.
2. It can supply the Bon Appetit plc’s restaurants the new element: Italian varied foods, such as olive oil, canned fish, pasta, and drinks etc.
3. Also, it will enhance the brand and image about Bon Appetit PLC in Italy.
4. After recreating the management system of Mario Ferrino, it will bring respectable profits for Bon Appetit PLC.


Reporter
Cody Chou.
15 August 2008