Case | HBS Case Collection | September 1986 (Revised July 2001)

Eastern Electric Apparatus Repair Company (A)

by Carliss Y. Baldwin and Harry Gruner

Abstract

As principals engaged in structuring leveraged buyouts for a well-capitalized risk arbitrage firm, Bob Meehan and George Schwartz are preparing to bid for the business and assets of a Westinghouse subsidiary. The case focuses on the value of the opportunity, methods of structuring highly levered opportunities, and the value of the equity claim. Also provides an opportunity to discuss the mechanism of a competitive bid, information asymmetries between buyers and sellers, and bidding strategies.

Keywords: Leveraged Buyouts; Bids and Bidding; Opportunities; Business Subsidiaries; Strategy; Valuation; Equity; Electronics Industry;

Citation:

Baldwin, Carliss Y., and Harry Gruner. "Eastern Electric Apparatus Repair Company (A)." Harvard Business School Case 287-023, September 1986. (Revised July 2001.)