Memo
Date: 23 June 2003
To: AT&T Board of Directors
From: Heidi Lomax
RE: Acquisition of Kmart Corporation
This memo will identify a synergistic acquisition candidate for AT&T. The company in question will be Kmart. We recommend AT&T to eventually acquire Kmart because we feel that AT&T needs to diversify into different realms. We will provide the terms of the acquisition, the price offering, financing, and potential negotiation strategies if the acquisition hypothetically did take place. Further financial data including price/earnings ratios, book value, current market value, liquidation, NPV, and diluted price per share will be presented in support of the acquisition. We are aware that AT&T is in financial striates; however, let us look at the proposed acquisition and its effect on AT&T anyways.
Kmart Corporation is a discount retailer and a general merchandise retailer. "The Company operates in the general merchandise retailing industry through 1,829 Kmart discount stores with locations in all 50 states, Puerto Rico, the United States Virgin Islands and Guam, as of January 29, 2003, and through its e-commerce shopping site (2003). In the same month last year, Kmart and 37 of its United States subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the federal bankruptcy laws, and, subsequently, obtained an exit financing facility. A year later, the court approved the closure of 326 stores located in 40 states, which number was later reduced to 316 stores, or approximately 17%, of the