The Valuation Exercise Report
1- Grade of the Valuation Exercise report submitted via Turnitin
2- Reservation prices submitted
3- Negotiation score: depends on how good the deal is, which the student makes.
Students do not lose grade, if they do not make a deal because market conditions
were not suitable to make a deal. Whether students make a deal or not, they leave
private notes about their deal-making strategy on the screen which would
contribute to their grade.
NOTE: make sure to read this document thoroughly and pay attention to the
important details. Please also read Harvard simulation guides and watch their
Step 1: Pre-Work
Download the Foreground Reading to learn more about the U.S. wine industry and the
simulation context. Read and use the information.
Download the Terminology Primer to review key terms before beginning the simulation.
Carefully pay attention to the details
Complete the Valuation Exercise (if required by your instructor) report and submit
by the deadline set in the syllabus’s course schedule via Turnitin:
o Important: Do not click on “I have submitted evaluation report”, unless you have
finalized your report on Turnitin. As soon as you click on “I have submitted
evaluation report” after you finalize your report on Turnitin, your report is
considered to be submitted on Turnitin and you cannot change it.
o You have access to the excel files for only 2 companies and some foreground
reading. You are not required to analyze IB Company, if you do not have its
financial information. You can write your report based on available information
and any research that you do using online resources (industry and economic
analyses for example).
o You submit your individual report before the deadline which is set in the syllabus.
It means the first 5 pages of your report should only and only reflect your own
work: your analysis, your findings and your recommendations in your own words.
You are allowed to work with your team on the case. For example, a group of four
students should submit 4 individual reports. While individuals can use their group’s
findings in their report, the main part (maximum 5 pages) of the report must be
organized and written individually to reflect the individual’s opinion on the case.
The main part of the report will be checked for potential plagiarism by Turnitin
software and the instructor. It is student’s responsibility to ensure that all citations
are done properly in the main body of the report and there is no plagiarism in the
report. For example, team members cannot copy-paste the same analysis as part of
the main section of their report. However, the appendices can contain the results of
the group work and may share common elements with the other reports. Therefore,
it is possible that your appendices have some matching elements with your other
team members, but your main body of report (5 pages) cannot share any similarity
in the text. Again, it means that you cannot copy-paste from each other and put it
in the main body of your report.
o The sample rubric used in grading the case report is available on the last page of
the syllabus. The students are able to see the feedback on their individual report,
the rubric of their grade and instructor comments on Turnitin. You can learn how
to see the details of the feedback and your grade on Turnitin via the following link:
Step 2: Role Preparation
Right after the deadline to submit your evaluation report (see the syllabus for the
deadline), you will see your role and your role preparation starts. Make sure to
bring all your material and files on a laptop or tablet to the class. If you do not
have a laptop, you can borrow a laptop from the circulation desk at library. If you
do not have a laptop, it is strongly recommended that you reserve the laptop at the
library for the class dates that involve the simulation and also inform the
instructor about your equipment requirement.
Once assigned a role, read the Introduction screen to familiarize yourself with your
Review the Historical Stock Price screen to learn more about the companies’ financial
Step 3: Analyze & Decide
There are two rounds in the simulation:
Round 1: starts on the session marked in the syllabus as “HB 7: Wine M & A session
1” o Instructor will discuss about some hints on the merger. Then, students start working on the
case in the class (students start to work on Round 1):
Student work is to modify assumptions:
Read the confidential information provided about your assigned role.
o What is the objective of modifying assumptions? Set Reservation Prices
Determine reservation prices. Each role must input reservation values for both Bel
Vino and Starshine. Reservation prices are due by 10am on the date for “HB
7: Wine M & A session 2”. Important: make sure to understand the effect of your
role on determining reservation prices: If you are a buyer, the reservation price for
your target is the highest price you would be willing to pay. If you are a seller, the
reservation price for your own company is the lowest price you would be willing
to accept. For example, let’s assume you are BV. Your reservation price for BV:
you are the seller => Reservation price is the lowest that you accept to be acquired
for. Reservation price for SS: you are the buyer => Reservation price is the highest
that you accept to acquire SS.
o Submit Bids
Negotiate with the other users and/or submit offers before the deadline set at
3:30pm on the date for “HB 7: Wine M & A session 2”. Simulation ends when
either a deal has reached or the time is up. You have the option to withdraw your
offer only before the counterparty accepts it.
If you are SS, your offer involves only an exchange ratio AND you also receive offers for merger from BV or cash offers from IB.
If you are BV, your offer involves only an exchange ratio AND you also receive offers for merger from SS or cash offers from IB.
If you are IB, your offer involves a cash offer to either BV or SS while you consider financial viability of your offer.
The best deal happens for you when either you sell your company at the highest price possible or buy another company at the lowest price possible.
Important: make sure to first fill out both comments boxes titled as “source of
value” and “negotiation strategy”. Make sure to also keep updating the boxes. Students are expected to make a deal, only if they face favorable conditions. Based
on your analysis of each company AND your reservation prices, you should be able
to justify why you did OR did not make a deal in these boxes.
You can click on the calculator on the top corner of the page which will help you
to make a reasonable bid, based on your role.
If you are SS or BV, the calculator helps you to decide about exchange ratio.
If you are IB, the calculator helps you to decide about the offer and your financing strategy.
I tried starting on the individual case simulation by completing the Valuation Exercise, but I still can’t
seem to find my assigned role.
You role will be revealed after you submit your evaluation report. At the start, you are expected to write
the evaluation report without knowing your role. Hence, your evaluation report is independent from
your role at the start. After you learn your role, you will be able to re-evaluate the firms based on your
I received valuation spreadsheets for Starshine and Bel Vino. Does this mean I play the part of
No, at this stage, your role is not revealed to you. Hence, your role has no effect on the preliminary
evaluation report. However, after your role is assigned, your evaluation practice will help you to
make decisions on the case.
I received no financial information for International Beverage. How am I supposed to calculate the
value of the firm pre-merger and thus determine a value of the synergy and reservation price
without this information?
You are not expected to evaluate a company for which you have not received the information yet. It
is a friendly reminder that, in M&A, you can evaluate the synergy even without knowing acquirer
financial information as we discussed in the class.
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