Capital Mortgage Insurance Case

Topics: Merrill Lynch, Financial services, Proposals Pages: 3 (1101 words) Published: November 13, 2009
Executive Summary
Merrill Lynch posses the share of the relocation services market. In arrangement with their vision of growth and diversification, CMI sees an importance in entering the relocation services market. Entry could round out their whole service offering and allow them to better compete with Merrill Lynch. Thus the CMI idea to create a “residential real estate financial services company” (Lewicki 576) was born. CMI’s proposal was made to and accepted by the MetroNet Third Party Equity Committee on March 1st. With the committee’s approval, Randall and Dolan began a series of discussions with CTS in March and April. CMI sees a lot of value in the coalition with well connected Eliott Burr, CTS executive, and his team. CTS is also enthusiastic to be acquired, but is concerned about their ownership venture post acquisition. Despite open communications between the sides about CTS operations, CMI is hesitant about the value of the acquisition propose and how it will affect the relationships between all players including MetroNet. The teams will meet on May 24th to review and negotiate CMI’s proposed offer of acquisition. Analysis

CMI’s primary concern is to enlarge their financial services capabilities and construct a sturdy network that can challenge Merrill Lynch. In order to do so, their most important goal is to get CTS at a rational price to fulfill the vision as proposed to and approved by MetroNet. A secondary goal is maintaining key management personnel and cementing a relationship with Elliot Burr. Conservation of good relationships with the CTS owners makes a collaborative strategy more effective to implement for the long run. If a deal is not reached, CMI’s BATNA would be to either build a relocation services in-house or try to get a similar company. As there are currently no other known targets for the latter, and the former could be expensive and time consuming, a negotiated deal is the strong predilection. CMI has some negotiating...
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