Case | HBS Case Collection | April 1991 (Revised December 1997)

Southland Corp. (A)

by Richard S. Ruback

Abstract

Examines the Thompson's $4.9 billion leveraged buyout of the Southland Corp. in 1987. As the original founders of Southland, the Thompsons were concerned about losing control over the company upon learning of the Belzberg family's acquiring interest. The teaching objectives are: to explore the characteristics of an LBO candidate, to examine the dynamics of the corporate control process when insiders are substantial stockholders, and therefore serve as both buyer and seller, and to evaluate the cash flow forecasts in an LBO and use them to analyze bidding behavior.

Keywords: Leveraged Buyouts; Governance Controls; Corporate Governance; Bids and Bidding; Valuation; Forecasting and Prediction; Management Analysis, Tools, and Techniques; Strategy; Cash Flow;

Citation:

Ruback, Richard S. "Southland Corp. (A)." Harvard Business School Case 291-038, April 1991. (Revised December 1997.)