Mebel Doran & Company Case Analysis
Mebel Doran Company is a Philadelphia based company, which started up as merchants, importers, and shippers and then developed to financial operations business. The Company offers services in stock and bond market in trading and mergers & acquisitions, The Company was the first to see the growing importance of M&A as a source of income to the securities firm.
Knox Corporation is a diversified manufacturing firm based in Philadelphia and is also one of the oldest clients of Mebel Doran & Company. The Company wants to acquire Delaware based Power -Tie corporation; a publicly traded manufacturer and Mebel Doran & Company were providing expertise for the deal. Mebel Doran & Company would provide bridge financing from banks for the deal and also propose tender offer for the issue.
Mebel Doran & Company had assisted Knox Corporation since 1951 in getting the firm public and also a number of financing for the Company in succeeding years. The idea of acquiring Power Tie Corporation was initiated by the M & A group of Mebel Doran & Company and believed that the deal would generate potential operating economies for Knox Corporation. Mebel Doran & Company had also assured complete confidentiality of information for the deal.
Mebel Doran & Company is involved in an Insider Trading on Power Tie Corporation. The CEO of Mebel Doran & Company, Harvey Hegarty found out the M&A group of his Company had consulted the arbitrage desk about few specifics of Knox Corporation. The M&A and the arbitrage group would consult each other at times in order to structure effective financial strategies for the client, however, when inquired with the arbitrage group, the CEO found out that the arbitrageurs within the Company used to be in touch with other arbitragers in the market for information on any deals happening in the market, had got an enquiry about the Power Tie Corporation deal, which wasn’t handled well by the...
Please join StudyMode to read the full document