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Distressed M&A and Corporate Strategy: Lessons from Marvel Entertainment Group's Bankruptcy

2016; RELX Group (Netherlands); Linguagem: Inglês

10.2139/ssrn.2843790

1556-5068

Financial Reporting and Valuation Research

Purpose: This paper illustrates the viability of distressed M&A by way of case study utilizing the modern Graham and Dodd valuation approach. Design/methodology/approach: The paper presents a distressed acquisition case study of the 1996 Marvel Entertainment Group (Marvel) bankruptcy. It draws on previously published Graham and Dodd methodological materials as well as a financial case study of Marvel that was prepared at the time. The valuation presented in this paper is the sole work of the author. Findings: The case study supports the view that distressed M&A can be a viable corporate strategy alternative. It also demonstrates how a multi-layered valuation approach such as Graham and Dodd can be ideal for identifying value that may be hidden in the confusion and distress of bankruptcy. Practical and research implications: The case study illustrates, first, the viability of distressed M&A as a corporate strategy alternative, and second, the valuation insights that the modern Graham and Dodd approach can produce in a distressed setting. Originality and value: This is the first paper that we are aware that applies Graham and Dodd-based distressed M&A valuation to corporate strategy.