Introduction to Corporate Finance

Course Overview

This three day corporate finance course begins by a thorough introduction to raising finance on the capital markets. Equity instruments and restructuring strategies are discussed in relation to flotations and the subsequent equity financing of public companies. The roles of advisors are described together with the relevant regulatory requirements.

Public company takeovers are considered from the point of view of the offeror and the offeree and the principal rules of the Takeover Code are explained. In respect of all these activities the purpose and objectives of corporate governance is clarified.

The second day is devoted to corporate finance issues for smaller companies and covers small acquisitions, disposals, buy-outs and financings.

The final day introduces participants to basic business valuations, a very important technique for corporate financiers. The mechanics of discounted cash flow arithmetic will be covered including the structuring of a model and participants will also gain a grasp of the issues surrounding the choice of the discount rate.

They will also learn about earnings based methods which are commonly used in valuing businesses in a variety of differing circumstances and address the alternative valuation techniques that may be deployed.

Participants will be required to bring a laptop to day three of the seminar.

Course Content

Equity Finance

• Ordinary shares, preference shares
• Capitalisation issues & share splits
• Convertible loan stocks & equity warrants
• Vendor placings
• The class tests
• Demergers, spin offs, carve outs & tracking stock
• Direct dividend & triangular structures
• Schemes of arrangement & liquidation schemes
• Statutory demergers & schemes of reconstruction
• Share buy-backs & treasury shares
• Reduction of share capital  

Stock Market Flotations

• The Regulatory framework, FSMA & key listing rules
• Suitability for flotation & initial decisions
• Methods of flotation
• Advantages & disadvantages of a listing
• Rights issues, open offers & the IPC guidelines
• Sponsors, Stockbrokers, Accountants & Solicitors
• ADRs & GDRs
• The Alternative Investment Market (“AIM”) 

Public Company Takeovers

• Initial considerations
• Hostile bid tactics & defence strategies
• Introduction to the Takeover Code
• Launching an offer
• Insider dealing
• The OFT & Competition Commission 

Continuing Obligations

• UKLA requirements
• The Model Code on directors’ dealings
• The purpose of corporate governance 

Acquisition Strategy for Buying Private Companies

• Acquisition objectives
• Process and commercial errors
• Keys to success
• The acquisition plan
• Screening the targets and the approach
• Commercial assessment  

Disposal Strategy for Selling Private Companies

• Typical mistakes in disposals
• Pre-sale planning
• Appointment of advisers
•  ‘Sell side’ due diligence
• Grooming and separation issues
• Presenting the information
• Using the dividend growth model approach
• Linking the dividend model with the price earnings (PER) ratio
• Understanding the key drivers of PER – risk and growth assumptions
• Relative sector PER’s and the implications for future value
• Concept of EBIT and EBITDA multiples of enterprise value (EV)
• Cashflow multiples – EV / FCF, price / cashflow per share
• Sales, asset and other multiples used for valuation
• Discounted cashflow valuation
• Cost of capital issues
• Terminal value 

Valuation Techniques 

• Using the dividend growth model approach
• Linking the dividend model with the price earnings (PER) ratio
• Understanding the key drivers of PER – risk and growth assumptions
• Relative sector PER’s and the implications for future value
• Concept of EBIT and EBITDA multiples of enterprise value (EV)
• Cashflow multiples – EV / FCF, price / cashflow per share
• Sales, asset and other multiples used for valuation
• Discounted cashflow valuation
• Cost of capital issues
• Terminal value

Delivering this course in-house for you to a number of participants could be very cost effective. Please call us on 020 7387 4484 to discuss this further.

If you have any questions about this seminar please write to us at post@redcliffetraining.co.uk.