NationStates Jolt Archive

Mediterranean Skyways, ViZion's fourth largest airline, and one that flies across the globe, has gone up for sale. It has recently run into problems with money, and has stopped growing.

It does have a total of 931 aircraft currently, and flies to over 100 countries globally. It is an above-average airline in prestige and quality, and it looking for another luxury-oriented airline to take over. The highest bidder will take it home.

The requirements:
-The name Mediterranean Skyways must be kept - however, a merger of the names is acceptable.
-Buyout of upto 50% of the current staff, offering to pay them one and a half years worth of pay. There are 16,162 employees.
-Those staff that remain are required to stay with the company four six years or until their retirement - whichever comes first.
-Above mentioned staff are required to keep or increase their pay. Decreases will not be accepted.

Last years net profit came in at $384 million, while gross was at $821 million.

We are starting our buyout price at: $250 million USD. We will go to the highest bidder.

What was its previous year's profit?

Last years net profit came in at $384 million, while gross was at $821 million.

Lange Industries wishes to offer $250.1 million USD for Mediterranean Skyways.

Why would anyone sell an asset for a price that the asset will make back in profit within about 8 months? RL businesses usually go for 5-10x their annual profit, sometimes more if they have substantial fixed assets.

EDIT: Also, when will the auction end?

Dominion International Airlines wishes to bid 255 million Emerald Galleons, estimated USD value is 285 million.

Exchange rate:
http://nsdossier.texasregion.net/main.aspx

Lange Industries raises its bid to $300 million USD.

Why would anyone sell an asset for a price that the asset will make back in profit within about 8 months? RL businesses usually go for 5-10x their annual profit, sometimes more if they have substantial fixed assets.

EDIT: Also, when will the auction end?
The owners are simply looking to offload. Also, keep in mind that's the starting price, and it will only rise. As for when it will end, there's no set ending date. It will continue until all but the final player is out.

Thank you,

CFO John King

Dominion International Airlines will up its bid to 350 million Emerald Galleons, worth 399 million USD and will cover the fee for every staff member in filing for Dominion citizenship; all other citizenships currently possessed will be recognized as well.

The fee is 50 Emerald Galleons per person and we would need the total number of staff (we are willing to hire them all) to calculate the savings.

Lange industries will offer $500 million USD, we will retain all current employees, offer pension planes to all employees currently employed with the company, we will not be relocating any employees, or facilities, for at lease 3 years, and will donate $100 million USD to the charity of your choice.

Current Company Bid: 500 million EG = 570 million USD

Extra:
Free Dominion citizenship courtesy of DIA
Will not move any employees or facilities for minimum ten years, longer is negotiable depending on circumstance
Based on record of service before absorbtion, employees will have access to DIA's Customized Retirement Plan, allowing them to pick which benefits are right for them (to an extent, of course)
Employees will receive DIA's Preferred Employees' Port-of-Call package which includes:
Prepaid hotel voucher accepted at over 40 international chains; good as long as employment lasts
Car Rental Voucher accepted by 10 international companies; good as long as employment lasts
Luggage set
Dominion Public Transit and Historical Attractions pass; good for six months before renewal and valid anywhere in the Dominion

OOC: With that, I will pick up again tomorrow. Should I not respond within 24 hours, consider me disqulaified from bidding.

Lange industries will offer $600 million USD, we will retain all current employees, offer pension planes to all employees currently employed with the company, we will not be relocating any employees, or facilities, for at lease 3 years, and will donate $100 million USD to the charity of your choice, we will also give ever employee a 2 lb tub of O2 Clean, 3 tubes of Mega Putty, and a scratch be gone CD/DVD scratch removal kit.

WorldAir in conjunction with FitzhughCoopers-Easlyn Financial Group would like to place a bid of $650 million and 0.5% of Class B (voting) stock in WorldAir Group Inc, parent company of WorldAir. The total value of this offer package is $1.35 billion.

Official Announcement of Kevin Nivensky of Allanean Arms

Due to the giant [some may say epic] profits derived from the sales of production rights to Angstrom gigacarriers and Aggressor supertanks, I can now happily bid on this company. I place my starting offer at thirty-five billion dollars [35,000,000,000].

CEO of Zeonic Corporation

We'll bid 45 billion credits for it.

Dyelliflot, the Dyellian National flag carrier, wishes to bid $6 billion US for what we assume is a 100% share in Mediterranean Skyways.

While some people might raise questions about Dyelliflot lending it's poor safety record to Mediterranean Skyways, we can assure you that the crashes experienced by Dyelliflot are entirely due to pilot incompetence and/or inebriation, not to do with the maintenance work done by ground crews.

http://img.photobucket.com/albums/v387/Praetonia/ial.png
Imperial Airways plc.

PRIVATE AND CONFIDENTIAL

Inquiry into potential purchase of Mediterranean Skyways [plc.?]

To the Honourable Board and Company of Imperial Airways plc.,

In response to your request of the 16th of this month for recommendations as regards the board's issuing a bid for medium-sized ViZionian carrier Mediterranean Skyways, I have assembled a number of salient facts for the board's perusal, and my own recommendations on that basis.

1. The company produces poor profits on gross earnings.

2. The company operates a significantly larger fleet than similar companies that produce similar profits. On average, three to four Mediterranean Skyways aircraft are required to produce the same net profit as a single aircraft operated by an average private carrier. Although this may be indicative of wider, insoluble problems, it may also indicate that there is significant scope for increasing the value of the business by adopting more efficient business practices.

3. The company appears significantly understaffed, although the bulk may be made up by subcontractors.

4. The company's insistance on buyers retaining previous employees is difficult to explain. It is possible that the company is a partnership owned by its permanent employees. If so, increasing efficiency may prove difficult and obstructive staff may be difficult to remove.

On a standard price-to-earnings basis, the company has an estimated market capitalisation of [$2-5 billion]. However, the company's significant fixed assets in terms of aircraft, and its potential for very significantly increased profitability under competent management may make bids as high as [$8 billion] worthwhile. However, it should be noted that efficiency reforms may be more difficult than suspected, and wider inefficiency may, at worst, be the result of an old or poorly maintained fleet that would be too expensive to ammend for ownership of the company to be worthwhile.

At present, I would therefore recommend the Board bid toward the upper end of the [$2-5 billion] range, unless more information on the cause of Mediterranean Skyways' poor performance becomes available.

I beg to remain, Sir, your most humble and obedient servant,

Mr H Lawson
Head of Department
Department of Mergers and Acquisitions
Finance Div.

Addendum to the above: It has been brought to my attention that bids in excess of [$35 billion] have been issued. It does not appear possible for anything but a substantial loss to be made on such an arrangement. No new information has come to light on the company itself. As such, I must stand by my initial conclusions and, as the bidding has advanced past the upper limits of potential profitability, I must recommend to the Board and Company that Imperial Airways plc. does not involve itself in this acquisition.

DIA will issue a final bid for 50 billion Emerald Galleons worth 57 billion USD plus all aforementioned benefits. We, being a private organization, cannot go higher without government support lest we severely cripple our treasury.

OOC: Just a little heads-up to all bidders:
Unless your nation's government owns the airline doing the bidding (which is more than a little socialist) bidding based on your GDP is kind of shaky seeing as no private corporation, letalone an airline, would make the profit of, in my case, a 5+ billion pop nation. Namely, DIA wouldn't have the Dominion government's budget of $112,739,161,333,770.00 at its disposal.

Lange industries, wishes to make a bid of $60 billion USD, with the aforementioned benefits.

(OOC: Lange industries is a international conglomerate that owns many smaller businesses world wide, so that is why it is able to spend so much money on this company.)

[OOC: Here is some basic economics:

1. People want to make money, not lose vast quantities of it.
2. If you pay money for something, you no longer possess that money. You have lost it.
3. People buy things because the things themselves are valuable. They either serve some practical function (such as food) or, in the case of investments like this, make more money.
4. Mediterranean Skyways makes $384 million per year. Therefore, if you own it, you will get an income of $384 million each year.
5. If you pay $60 billion for a $384 million annual income it will take 157 years for you to end up with the same amount of money you started with.
6. People do not live for 157 years.]

[OOC: Some people do understand basic economics, it's not what Mediterranean Skyways makes now, but what they could, if well lead and developed, make in the future, that is what good conglomerates do, they find businesses that are inexpensive, and are not making a lot of money, but have the potential to make more, if properly managed. It's a risk Lange Industries is willing to take. You have to spend money to make money, and it is highly doubtful that a company will make the same amount of money every year for 157 years, it could go up or down, we just think it will go up, and greatly so.]

Give me an example of a conglomerate paying 240x the market capitalisation for a business.

Give me an example of a conglomerate paying 240x the market capitalization for a business.

[OOC: I can't say that I can, but if no one ever did anything that had not been done before we still wouldn't have fire, some one has to be the first, just because it hasn't happened before doesn't mean it won't work.]

[OOC: I can't say that I can
Right, because it's stupid and real people don't throw their money away like that. I don't necessarily object to you bankrupting your company by paying more than it would cost to completely duplicate Skyways's operations, but this kind of ludicrous bidding seems to occur on every bid thread on this forum. It is simply bad RP and it's about time we put a stop to it.

OOC: Prae, he's competition, shouldn't you be HAPPY he's spending a ton of money in what you view as a waste? lol

OOC: Icly, yes. OOCly Im more interested in sensible RP than just securing IC advantage.