Prof. Scott Moeller
As the autumn 2012 term rolled along at Cass Business School in London, blockbuster news flashed across trading screens around the world: talks to merge the U.K.’s BAE Systems with the European Aeronautic Defence and Space Company (EADS) to create the world’s largest aerospace and defence firm.
Like many publications, the Financial Times reported many aspects of the proposed linkup – which eventually collapsed amid political wrangling – including an article on BAE’s mixed record in trying to grow through acquisition.
And that presented Prof. Scott Moeller with a real-time opportunity to present some added context to students of his Mergers & Acquisitions class at Cass.
“The literature about serial acquirers ('hyperactivity', as it is called in this article) actually shows that they outperform those who do deals less frequently,” he wrote in an annotation to the news article through FT Newslines, a special feature on FT.com that Cass and more than 60 other business schools have access to.
“Nevertheless, the article is clearly correct that this has not been the case with BAE, and does identify the principal problem that they have had with their serial acquisitions: they have not stuck to what they know well,” wrote Prof. Moeller.
‘It’s something you can really use’
Previously an investment banker in New York, Tokyo, Frankfurt and London, Prof. Moeller uses FT Newslines to demonstrate to students that what they’re learning at Cass isn’t just ivory-tower theory.
“I’m a professor of the practice of finance,” he says. “I’m a former investment banker. I want to show students that what we discuss is current and something you can really use outside the classroom.”
So Prof. Moeller and other professors who regularly annotate articles through FT Newslines comment on such topics as “unused excess cash” on many corporate balance sheets, the difference between a real and make-believe “merger of equals,” and the historically lower success rate of hostile mergers. The annotations appear alongside the article on the right of the computer screen – often adjacent to specific passages.
Through a Newslines tool, those making annotations can specify whether the comments are seen only by their class or by a wider audience of FT.com subscribers – including professors and students at other business schools around the world. Newslines is decidedly not a free-for-all online approach that allows anyone to comment, however qualified, but is aimed at eliciting expert comment from people extremely well informed about a topic.
“With the BAE-EADS talks, we looked at golden shares because we were talking about active and passive defense strategies in class,” says Suneel Sadhwani, a student in Prof. Moeller’s course who is studying for an Executive MBA.
He also sought out Prof. Moeller’s annotations on the proposed merger of natural resources companies Glencore and Xstrata. After several recent failed “mega-deals” in the telecoms and financial services sectors, completion of the Glencore-Xstrata linkup would “go a long way toward demonstrating that such deals can complete, even if after a long time and lots of hard work and negotiation,” the professor wrote in a recent annotation.
Martina Vasileva, who recently completed a masters programme in trade and finance at Cass, said the annotations “are really useful when there is a big deal going on, because the professor will point out the parallels between that deal and some other deal we’ve studied in class, or to point out increased M&A activity in a given sector.”
An onscreen look at FT Newslines
Football and finance
One deal that Prof. Moeller frequently refers back to is the acquisition, in 2005, of the Manchester United football team by the U.S.-based Glazer family – particularly how the Glazers used debt financing to build their stake. Through Newslines, professors have access to a seven-year archive of FT.com so they can find articles relating to the history of a case.
The Manchester United case is a high-profile one whose relevance to Cass students – and to Manchester United fans – hasn’t faded since the Glazers took control seven years ago. Many fans of the “Red Devils” are concerned that high debt levels continue to hamper the club’s ability to acquire pricey new players, yet it hasn’t prevented Manchester United winning the Premier League title in England four seasons out of the past six.
Business schools like Cass have access to FT Newslines through an education licence purchased from the FT, which in Cass’s case provides a subscription to the FT.com to the school’s 1,500 students – along with access to Newslines and its annotations.
Students who demonstrate an understanding of business and world affairs through the FT have an advantage in job interviews, because employers want to recruit people with an understanding of markets, clients and politics.
Another business school that uses FT Newslines, the University of St. Gallen in Switzerland, created case studies based on FT articles and made them required reading for students in advance of a 90-minute interview with a panel of professors and recruiters – and then got feedback from the panel.
“Use of FT case studies provided the chance to calibrate assessment and quality aspects of MBA recruiting for Credit Suisse,” says Roger Schlapfer, a strategic recruiter for Credit Suisse and a member of the panel. “This was a very good mix between theoretical and practical approach.”
Education licence and corporate licence
Real World MBA
The FT in recent years has introduced the education licence and a corporate licence aimed at law firms, companies and other organisations with multiple users of FT.com. These were devised in order to provide benefits to the subscribing organisations such as features tailored to their requirements, while fairly pricing the use of FT.com by multiple users.
In the case of the education licence, one aim is to get students used to reading the FT and relying on the FT for essential information, and hopefully to retain those readers long after they have finished their business-school education.
In Prof. Moeller’s master’s degree classes, reading the FT is even an essential part of each student’s final grade, as he has fashioned weekly quizzes that are partly based on financial-news developments reported in the FT.
For example, earlier this year students were asked questions such as: “Which airline announced this week that they were engaging investment bankers to develop a takeover defence strategy?” (Answer: Qantas) and “Warren Buffett’s Berkshire Hathaway announced in the past week the purchase of a business in which industry?” (Newspapers).
“What I’m really trying to do is to get everybody to read the FT,” says Prof. Moeller. “That’s a habit they should take with them after they leave school.”
More on an FT education licence: www.ft.com/education
FT Newslines dashboard: www.ft.com/newslines