T. Eaton Company Limited’s Initial Public Offering Case Solution & Answer

This Case is about Finance, International

Publication Date: 01/29/1999

Canada’s largest independently owned department store, The T. Eaton Company Limited, founded in 1869, recently emerged from bankruptcy protection and is now intending to raise $175 million through an initial public offering (IPO). Investment bankers consider the appropriateness of the time for the problem and must establish the proper share price. The case describes the bankruptcy protection procedure and North American retail business trends, and provides a thorough discussion of the IPO process and valuation factors. Comprehensive comparables are provided for such companies as Dillard, Nordstrom’s and Federated. The case provides the opportunity to implement numerous valuation techniques including discounted cash flow, cost-to-earnings multiples, and enterprise value-to-EBITDA multiples.

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