Lester Electronics Financing Alternative Benchmarking

The first concept that is relevant to the financing alternative benchmarking with Lester Electronics is financial capacity. When it comes to mergers, a company must have enough financial resources to fund the acquisition (Ross, Westerfield, & Jaffe, 2005). The two companies that were benchmarked, namely, Fidelity Bank and Dow Jones, exemplify the importance of possessing ample financial support to be involved in a merger.

The Fidelity Bank of Nassau, Bahamas is recently negotiating a cross-border acquisition deal with the Royal Bank of Canada. This acquisition deal is the first of its kind, involving parties that span a wide geographical distance. The joint venture, dubbed as the Royal Fidelity Merchant Bank & Trust Limited, needed about U.S. $1 billion worth of client assets. As a matter of fact, Fidelity’s CEO and chairman Anwer Suderji states that more than half of Royal Fidelity’s assets are under custody in order to fund the merger between two banks that are miles apart.

Dow Jones is also currently considering a merger deal with Rupert Murdoch’s News Corp. Murdoch’s strategy is to offer to purchase shares on the Wall Street Journal from Dow Jones, the majority of which