Times Mirror Co. PEPS Proposal Review (296-089)

Tufano, Peter and Santangelo, Robert (1996) Times Mirror Co. PEPS Proposal Review (296-089). [Case]

Abstract

Times Mirror Co. (TMC) owns a substantial block of Netscape common stock purchased prior to Netscape's IPO, on which it has substantial unrealized gains. TMC is restricted from selling the stock in a public offering and is therefore considering a proposal by Morgan Stanley to issue Premium Equity Participating Securities (PEPS) to monetize its Netscape holdings. These PEPS would pay interest quarterly and be redeemable in five years at a price tied to the value of Netscape shares, subject to certain formulas and call provisions effectively apportioning the upside in Netscape stock between TMC and the PEPS investors. The tax treatment of the PEPS, while unclear, is of significant importance.

Item Type: Case
Keywords: finance, accounting, financial management
Subject(s): Finance
Date Deposited: 01 Apr 2016 13:41
Last Modified: 01 Apr 2016 13:41
Funders: n/a
URI: http://eureka.sbs.ox.ac.uk/id/eprint/6031

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