The proxy for a special meeting of this engineering, procurement and construction company had the seven proposals related to a merger with another company. The materials were complicated and technical.
In researching the transaction, the following key factors were identified:
- The merger is actually an acquisition of Chicago Bridge & Iron
- Major financial investors in the company are in favor of the deal
- The company stock has not performed well for an extended time
A McKinsey & Company study from years ago showed that only 1 out of 7 acquisitions created shareholder value. One of the most common reasons for the lack of shareholder value creation (for the acquirer) is a transaction price that is too high.
This proxy is for the company being sold, hence a high selling price is good. Based on available information, Magni voted for all seven proposals.
