A company engaged in the financial services sector announced its plan to execute a takeover bid for one of its peers, which was negatively perceived by the market, as the market cap of the acquiring company is lower than the target company. For that reason, there are serious doubts about the financing of the transaction, as well as the synergies and economies of scale that could be achieved, which in turn leads to a double-digit fall in the acquiring company’s stock during a single trading day.
For its experienced team in corporate events and M&As, IRStrat is engaged as advisor in the acquisition process, contracting its IRStrat II solution package (“Strategic Message”) with the mandate to broaden the client’s communication outreach and sharpen the acquisition’s message to convince the market that the latter will help strengthen the client’s business in the long run, dispelling the skepticism that negatively impacted the valuation and trading of our client’s stock.
IRStrat swiftly conducts a comprehensive survey to gather the market sentiment about the transaction. Using the information collected, IRStrat develops and carries out an express repositioning and communication plan. Afterwards, an extensive PR agenda is defined, and a dissemination plan is prepared, consisting on multiple carefully-crafted messages to effectively communicate the value created by the transaction (once the corresponding due diligence has been thoroughly reviewed with the company’s management). IRStrat also helps appoint the executives responsible for providing interviews and communicate timely and strategic updates on the transaction.
IRStrat executes a swift and comprehensive plan which includes an effective exposure oriented towards the most influential financial media (TV, print and radio). Additionally, IRStrat conducts presentations to the analysis and promotion departments of major brokerages and financial institutions, as well as to portfolio managers of the most important investment and pension funds currently holding our client’s stock.
The drop in our client’s share price reversed, climbing 15% when compared to the closing price prior to the public announcement of the takeover bid; thanks to the detailed explanation of the benefits of the transaction and its funding sources.