Czech Mate: Cme and Vladimir Zelezny (a - E)
Posted: 10 Nov 2005
Date Written: February 10, 2004
SUBJECT AREAS: International finance, Joint Ventures, Negotiations, Political risk, Shareholders relations
CASE SETTINGS: Czech Republic; Broadcasting industry; $170 million revenues; 1997
This case examines how insiders can expropriate value from shareholders in emerging markets when property rights are ill-defined. As such, it provides a platform for considering how institutions and legal rules impact financing patterns and economic outcomes. CME, controlled by the former U.S. Ambassador to Austria, Ronald Lauder, and its Czech partners win the bidding for the first private broadcast frequency with national coverage in the Czech Republic in 1993. After the entity succeeds dramatically, the primary Czech partner wants to sell his share in the operating company. CME must decide whether to buy the stake and at what price.
Note: Teaching Note Available.
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