ACFI2304 EQUITY & FIXED INCOME VALUATION COURSEWORK

Due Date: 17th March, 2016 (Turnitin required)
Weighting: 40%
It is early 2016 and you are operating as an adviser to Tesco plc who is considering acquiring J Sainsbury’s plc. You are required to submit a report to the Board of Tesco containing the following items:
1. An analysis of J Sainsbury’s plc within its industry context, this should include normalised financial statements and ratio analysis. (15 marks)
2. Analysis of the current (as of 2015) economic climate and industry performance
(15 marks)
3. A valuation of J Sainsbury’s plc (expressed as a price per share, P0) using as many different methods as you can (using the provided annual report). Your valuation should also include analysis of the valuation techniques used. (50 marks)
4. The maximum price at which Tesco plc should bid for J Sainsbury’s plc (with justification)
(5 marks)
5. Outline any possible hurdles you may see in the way of Tesco plc successfully making the purchase and integrating J Sainsbury’s into the group. (10 marks)

NOTES:
There is no one correct answer here; as such you can score heavily with a range of values so long as the assumptions that went into the calculations are stated and reasonable.
Report format is required and 5 marks are available for the overall ‘feel’ or look of the report. This includes layout, structure, formality of writing, etc.
Your spreadsheet model should be submitted as an appendix to the report and on a CD/memory stick so it can be reviewed.
Obviously you are able to look at historical P0 values for J Sainsbury’s, don’t be concerned if your valuations are a long way off, just try to ensure that your assumptions are valid and your calculations accurate. You are not graded on how close to actual share price your valuations are.
Requirements 1, 2 & 5 must not exceed 2,000 words in total and it is anticipated that each of the three components will be at least 500 words.
Academic referencing is not required however when using or quoting figures you need to state their origin.