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1) What are the goals of and constraints faced by the French State? Rhône-Poulenc? Its workers? of Bankers Trust? The goals of the French State:
i. Reduce involvement of the state in French economy
ii. Cut the budgetary deficit
iii. Provide state-owned companies with access to private capital (including foreign capital) necessary for expansion iv. Add industrial diversity and liquidity to the equity market Constraints faced by the French State:

i. Concerned that the privatization program must be successful politically as well ii. Desired a broad distribution of stock, in which ultimate buyers would be both private individual investors and institutions – noyaux durs, long-term holders.

The goals of Rhône-Poulenc:
i. The offering would be fully subscribed with the widest possible participation by employees ii. The offering would not generate any of the financial costs of carrying unsold shares iii. The offering would require the company to grant only minimal investment incentives to the employees Constraints faced by Rhône-Poulenc:

i. Constrained by Tresor’s limitations on how generous the offering can be outlined, making the deal not so attractive to employees ii. How to encourage employees to purchase the firm’s shares in its forthcoming privatization?

The goals of its workers:
i. Receive as favourable conditions as possible
Constraints faced by its workers:
i. Not enough cash
ii. Aversion to riskiness of common stocks
iii. Might lose job and cash in the future

The goals of Bankers Trust:
i. Creating a unique deal and perhaps “success story” for further business ii. Maintain its reputation as being among the world’s most innovative banks and continue being regarded as among the top several banks in derivatives and risk-management expertise. Constraints faced by Bankers Trust:

i. Ensure that neither Rhône-Poulenc nor the French bank suffered any losses in conjunction...
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