Privatization of a Mexican Bank

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Minority public shareholders of a Mexican bank sued a Canadian bank that bought them out at an allegedly low price.

Minority public shareholders of a Mexican bank sued a Canadian bank that bought them out at an allegedly low price. In 2003, the Mexican government auctioned its remaining ownership interest in the Mexican bank. The Canadian bank was the sole bidder and paid an amount determined by valuations performed by two independent investment banks to purchase the Mexican government’s ownership and the remaining outside minority shareholders’ interests.

Professor Gompers explained that the investment banks employed generally accepted valuation techniques resulting in reasonable estimates of the value of the Mexican government’s remaining interest.

Defendants retained Cornerstone Research and Professor Paul Gompers of the Harvard Business School to evaluate the reasonableness of the investment banks’ valuations. Professor Gompers explained that the investment banks employed generally accepted valuation techniques resulting in reasonable estimates of the value of the Mexican government’s remaining interest.

Case Expert

Paul A. Gompers

Eugene Holman Professor of Business Administration,
Harvard Business School,
Harvard University;
Senior Advisor, Cornerstone Research