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Case Studies by Philippe Haspeslagh

28 case studies

by Publication Date
published: 01 Sep 2007

  • Topic: Strategy
  • Region: Europe

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Abstract:
The case discusses a conflict over strategy between the Management and Supervisory Board of Stork, a Dutch diversified company active in Aerospace, Food Systems, Technical Services and Prints, and two hedge funds, Centaurus and Paulson, which since 2004 have build a sizeable stake in the company. When an announced delisting and sale to private equity buyers fails , and management announces it intention to stick to a diversified strategy, the hedge funds decide to press the issue of a focus on aerospace. In October 2006 the hedge funds succeed in getting a majority at the AGM for their proposal to focus the company on aerospace. Nevertheless management, supported by its Supervisory Board, continues to consider such a strategy as too risky, and the vote as non-binding. In what had become one of the bitterest disputes of corporate governance in Dutch history, the Entreprise Chamber of the Court of Amsterdam takes the unprecedented step to appoint three "wise men" to the Supervisory Board of Stork, with a deciding vote in matters of strategy. In the meantime, Marel, an Icelandic Food machinery company has also build up a sizeable stake, hoping to be able to improve its chances of buying the Food Systems Division of Stork.

Pedagogical Objectives:
- Help participants to gain insight into the dynamics of Hedge Funds - Explore issues of corporate governance and the role Board Members play - Explore the differnce between shareholder and stakeholder perspective on Corporate Strategy - Explore the respective role of investors, board members and managers in determining corporate strategy

Keywords:
Hedge Funds, Board Role, Corporate Strategy, Corporate Governance, Shareholder Versus Stakeholder Perspective, Corporate Governance, Investors, Stakeholders and Accountability, Gpei, Gpei-Case

published: 01 Apr 2007

  • Topic: Strategy
  • Industry: Media and Information
  • Region: Europe

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Abstract:
The case focuses on the Nielsen Company, formerly known as VNU, facing investor opposition to its acquisition of IMS Health for euro 5.8 billion. It first describes the history of VNU and strategy of its CEO Robert van den Bergh as it redeploys its assets between 2000 and 2005 towards Marketing Information, and away from print media. The case then focuses on the acquisition of IMS Health which immediately becomes contested by activist investors Knight Vinke, joined by other regular investors such as Templeton and Fidelity. Meanwhile, a private equity group that includes Kholberg Kravis Roberts and Blackstone, is considering to take VNU private. The Board is considering its position carefully

Pedagogical Objectives:
The purpose of the case is to illustrate the dilemma facing Board members now that a new wave of active investors and hedge funds is increasingly questioning management strategies, and making their voice heard. What is the role of the Board vis-à-vis investors. How supportive can they be of management plans when these face shareholder challenge? To what extent are these investors purely event driven or to what extent do their arguments hold merit? How to navigate in an environment where these hedge funds and other active owners have become a powerful reality?

Keywords:
Corporate Governance, Activist Shareholders, Hedge Fund, Merger, Private Equity, Shareholders, Corporate Governance, Investors, Stakeholders and Accountability, Gpei, Gpei-Case

published: 01 Jan 2007

  • Topic: Strategy
  • Industry: Stock Exchange
  • Region: Europe

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Abstract:
This case focuses on the conflict between the Hedge Funds and the Board and Management of Deutsche Börse, following Deutsche Börse's hostile offer for the London Stock Exchange. It allows participants to role play the perspectives of the Supervisory Board, led by Dr. Breuer, the CEO, Werner Seifert, the Hedge Funds (TCI, Atticus) and traditional investors (including Fidelity and Merrill Lynch).

Pedagogical Objectives:
- Explore issues of corporate governance and the role board members play - Help participants to gain insight into the dynamics of hedge funds

Keywords:
Corporate Governance, Stock Exchange, Hedge Funds, Mergers, Activist Shareholders, Active Ownership, Corporate Governance, Investors, Stakeholders and Accountability

published: 01 Mar 2005

  • Topic: Strategy
  • Industry: Telecommunications
  • Region: Europe

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Abstract:
By early 1999, NTL was the third-largest and fastest-growing cable TV and telephony company in the UK, measured by homes under franchise; only Cable and Wireless Communications (CWC) and Telewest were larger. CWC's parent wanted to exit the industry, and was in advanced negotiations with Telewest. NTL's Chief Executive, Barclay Knapp, stepped in the moment they stalled, and immediately offered CWC the same terms at which Telewest had baulked. The £8.2b deal placed NTL definitively at the centre of cable consolidation in the UK. The (A) case examines NTL's acquisition strategy and the process leading up to the deal. The (B) examines the process of acquisition integration.

Keywords:
Acquisition, Merger, Integration, Telecommunications, Competition Policy, Strategic Assembly, Regulation, Industry Restructuring

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published: 08 Jan 2005

  • Topic: Strategy
  • Industry: White goods
  • Region: Europe

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Abstract:
International acquisitions have become an extremely important vehicle for growth for multinational companies. A key task for many MNC managers is the planning of such acquisitions and the integration of acquired companies in a manner that enhances the company's overall competitive advantage vis-à-vis other global, regional and national players. The case describes the white goods industry in Europe, the strategic complexity of a globalising industry, and the acquisition and later integration of Zanussi by Electrolux.

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published: 03 Jan 2005

  • Topic: Strategy
  • Industry: Telecommunications
  • Region: Europe

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Abstract:
Please refer to part A for the abstract.

Related:

published: 06 Jan 2004

  • Topic: Responsibility
  • Industry: Non-Food Retail
  • Region: Europe

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Abstract:
This (A) case describes how Guy Wyser-Pratte, a pro-active investor and corporate governance advocate, puts pressure on Royal Vendex KBB, the leading non-food retailer in the Netherlands, to alter its corporate governance system. In an impassioned speech at the 2002 annual meeting of shareholders, he challenges Vendex Supervisory Director, Harry Langman, to discard the company's dysfunctional corporate governance system by dismantling its anti-takeover structure, and granting more voting rights to its shareholders. How will the Board react and what will be the next step for Wyser-Pratte? Fresh from his victory for increased shareholder rights, corporate raider Wyser-Pratte, together with a coalition of active investors, tries in this (B) case to use these new found rights to influence the strategic direction of the Vendex company. In contrast to Wyser-Pratte's comments in the previous year, one investor - K Capital Partners - pressures management and the Supervisory Board to consider selling the company, in the belief that the conglomerate is undervalued, and that an acquirer would easily pay a 100% to 200% premium over the current share price, thereby maximising shareholder value.

Keywords:
Corporate Governance, Investors, Stakeholders and Accountability

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published: 06 Jan 2004

  • Topic: Responsibility
  • Industry: Non-Food Retail
  • Region: Europe

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Abstract:
Please refer to part A for the abstract.

Pedagogical Objectives:
The purpose of Case A is to allow a discussion on shareholder power and the response of the Supervisory Board in "Rhenan Capitalism" countries to this increased shareholder activism. Students can thereby discuss if they believe the motives/arguments of active investors in increasing shareholder value. Or do active investors merely look for short-term gains and a quick exit from their investment? The purpose of Case B is to allow a discussion on who is really in the best position to make strategic decisions within a company, management or shareholders? Students can discuss if they believe that active investors act in the interests of all shareholders (or stakeholders), or that they are simply looking for whatever short-term gains they can get? Does an increase in share price reflect the long term value creation potential of the company or merely give investors the opportunity to divest?

Keywords:
Corporate Governance, Shareholder Activism, Supervisory Board, Board of Directors, Shareholder Pressure, Strategic Decision-Making, Corporate Governance, Investors, Stakeholders and Accountability

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published: 01 Jan 2004

  • Topic: Strategy
  • Industry: Chemicals
  • Region: Europe

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Abstract:
The case describes the strategic planning process and performance management system implemented at DSM, a global chemical company. In particular, it describes how the company's Value Based Business Steering system is designed to create alignment between strategy formulation and execution through strategic value contracts. The case illustrates the performance management process in action at one of the business groups. It highlights managers' dilemma between continuing to pursue the current business strategy, which is in line with corporate strategy, versus responding to the financial pressures exerted by the new value-based management approach, which would require a radical change in strategy.

Pedagogical Objectives:
The case allows students to discuss the various elements of DSM's VBM-inspired strategy and performance management processes, and how they impact, one of the business groups' efforts to improve performance. The class can analyze the strengths and weaknesses of the company's approach to aligning its strategic planning and financial management processes by introducing strategic value contracts. Finally, the case shows how DSM distinguishes between performance indicators to monitor strategy implementation, and value drivers to measure economic value creation.

Keywords:
Strategic Planning, Strategy Development, Performance Management Process, Performance Contract, Strategy Dialogue, Value Based Management, Vbm, Performance Measurement, Value Driver

published: 11 Jan 2003

  • Topic: Strategy
  • Industry: Food and Drink
  • Region: Europe

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Abstract:
Please refer to part A for the abstract

Pedagogical Objectives:
The immediate purpose of the series is to allow an informed discussion on the use and implementation of so-called Value Based Management, from a broader managerial rather than the typical financial perspective. The broader purpose is to illustrate how VBM can lead to Corporate Transformation and a sharpening of Leadership Practices in large firms.

Keywords:
Value Based Management, Corporate Transformation, Leadership Practices, Managing for Value, Performance Management Process, Performance Contract, Strategy Development, Strategy Dialogue, Economic Profit, Incentive Compensation

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