Capital Mortgage Insurance Corporation (a)

In: Business and Management

Submitted By khaledyouri
Words 31627
Pages 127
Lewicki−Barry−Saunders:
Negotiation: Readings,
Exercises, and Cases, Fifth
Edition

Cases

1. Capital Mortgage
Insurance Corporation (A)

© The McGraw−Hill
Companies, 2007

Case 1

Capital Mortgage Insurance Corporation (A)
Frank Randall hung up the telephone, leaned across his desk, and fixed a cold stare at
Jim Dolan.
OK, Jim. They’ve agreed to a meeting. We’ve got three days to resolve this thing. The question is, what approach should we take? How do we get them to accept our offer?

Randall, president of Capital Mortgage Insurance Corporation (CMI), had called
Dolan, his senior vice president and treasurer, into his office to help him plan their strategy for completing the acquisition of Corporate Transfer Services (CTS). The two men had begun informal discussions with the principal stockholders of the small employee relocation services company some four months earlier. Now, in late May 1979, they were developing the terms of a formal purchase offer and plotting their strategy for the final negotiations.
The acquisition, if consummated, would be the first in CMI’s history. Furthermore, it represented a significant departure from the company’s present business. Randall and
Dolan knew that the acquisition could have major implications, both for themselves and for the company they had revitalized over the past several years.
Jim Dolan ignored Frank Randall’s intense look and gazed out the eighth-floor window overlooking Philadelphia’s Independence Square.
That’s not an easy question, Frank. We know they’re still looking for a lot more money than we’re thinking about. But beyond that, the four partners have their own differences, and we need to think through just what they’re expecting. So I guess we’d better talk this one through pretty carefully.

Company and Industry Background
CMI was a wholly owned subsidiary of Northwest…...

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