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Create a 3 page essay paper that discusses Stakeholder Groups Involved in the Takeover.Download file to see previous pages It is evident that the Ferrovial shareholders did not view the takeover in a
Create a 3 page essay paper that discusses Stakeholder Groups Involved in the Takeover.Download file to see previous pages
It is evident that the Ferrovial shareholders did not view the takeover in a positive light. This was because the takeover deal was satisfied with a large amount of borrowing which caused a humongous change in the firm’s leverage. Following the takeover, there was a continuous declining trend in the share price of Ferrovial following the takeover. The price went from €60.57 on 31 May 2006, hitting a low of €50.76 on 16 June 2006, to a €58.56 at the close of the month. Though Ferrovial had made cash payment for BAA and the takeover did not dilute the ownership of Ferrovial, the stock prices continued to decline in the following years. The current share price of Ferrovial is down to a €19.38.BAA employees:Ferrovial had indicated that it would ‘sell its 50% interest in Bristol airport to co-owner Macquarie’. In addition, the Spanish company also expressed intentions for cutting costs at BAA to make it even more profitable (Lea, Robert, 2006). This obviously aroused great fear in the employees of BAA. Employees also believed that Ferrovial was unfamiliar with the industry and would, therefore, be unable to bring much improvement to BAA. However, many of the fears of BAA employees were quenched as the takeover did not cause any massive layoffs. However, to improve the efficiency of the system, several British managers were laid off. BAA Creditors:Some of BAA’s bonds were downgraded and became junk bonds. The bondholders lost out heavily, as they received little compensation for their initial investments.