Project Wyndmere — Spectrum Valuation & Minority Squeeze-Out
A 2-hour Telecom / Spectrum Squeeze-Out case study with a complete model answer
Modeled After
Centerview Partners
Special committee materials for a spectrum-holding company: $/MHz-pop precedent spectrum acquisitions and an EV/MHz-pop price ladder used in place of trading comparables, which are explicitly excluded as having no true comparable, plus a majority-of-the-minority vote analysis with the share register and a vote-outcome matrix, and the NPV of spectrum leases as an enterprise value bridge item
Structure and exhibit set are modeled after Centerview Partners. The company, the financials and every figure in this case are entirely our own.
The Situation
Wyndmere Wireless, Inc. (Nasdaq: WYND) is a spectrum holding company.
Wyndmere Wireless, Inc.
- Sector
- Telecommunications — a spectrum holding company selling wholesale capacity to carriers, with no retail subscribers and no consumer brand
- Size
- Geography
- United States — Federal Communications Commission licenses across partial economic areas and metropolitan markets, with a US-listed equity and a US-dollar funding stack
- Ownership
- Situation
The Prompt
20 per share in cash. Value the licenses.
Supporting Materials
What you are handed at the start of the case, in the format a real process would use.
What You Have to Produce
The deliverables, in the order the committee will read them. The exercise runs 120 minutes.
PART 1
The portfolio, as a product
PART 2
The precedent evidence, screened by band
PART 3
The adjustment ladder
PART 4
The obligations that ride with the licenses
PART 5
The net asset value bridge and the diluted count
PART 6
Enterprise value per MHz-pop — the ladder
PART 7
The interim financing
PART 8
The majority-of-the-minority vote
PART 9
Sensitivity, the cross-check, and the recommendation
How to Approach It
The order a strong candidate works in, and why. This is the shape of the answer — the finished answer deck and Excel model are in the solution set below.
- 01
Decide the instrument before you build anything
- 02
Screen the extract before you type a number
- 03
Build the portfolio and the sets together
- 04
Run the ladder, then the obligations, on one rate and one term
- 05
Bridge, then invert the bridge
- 06
Then the governance work, which is where this case is won
- 07
Write the deck, and lead with the answer
Key Concepts
The ideas this case is built on. Know these cold and the case becomes a question of execution rather than knowledge.
Dollars per MHz-pop
The unit spectrum trades in. One MHz-pop is one megahertz of bandwidth over one person of covered population, so a portfolio's quantity is the product of bandwidth held and population actually covered — never a stated total. Prices per MHz-pop are observable from auction results and secondary license transfers, which is what makes it possible to value spectrum this way: the evidence base is transactions rather than peers.
Band matching
A MHz-pop is not one currency. Low-band signal travels far and penetrates buildings; millimeter wave does neither, and needs vastly more sites to cover the same people. The result is that the bands trade orders of magnitude apart per MHz-pop, and a precedent set blended across them produces a rate that describes none of its members. Every rate is struck against a set matched to the band it is being applied to.
Leasehold tenure
Mid-band channels of this kind were originally licensed to institutions that were never going to build networks, so the commercial route to using them has always been a long lease rather than a purchase. A leaseholder's interest ends; a licensee's, in economic substance, does not. What a finite interest in an infinite-lived asset is worth is the present-value fraction of a perpetuity truncated at the remaining term — a computation, not a haircut.
Buildout obligation
Licenses carry performance requirements: build to a stated coverage by a stated date or forfeit the license. That makes buildout capital a cost of KEEPING the asset rather than a discretionary investment, and a valuation that carries the license at a market rate without charging the capital has priced an asset the company would not still own.
Below-market capacity commitment
A long contract that sells capacity at a rate below what a third party would pay is a liability to whoever buys the equity, whether or not the seller thinks of it as one. The shortfall — the rate gap times the committed quantity, present-valued over the remaining term — is what a buyer inherits, and it is especially awkward when the counterparty on the contract is also the counterparty on the offer.
Majority of the minority, outstanding versus voted
A minority-approval condition can be struck on the shares held by unaffiliated holders OUTSTANDING, or on those actually VOTED. The first is materially harder: it requires a majority of every unaffiliated share regardless of turnout, so the support needed from the shares that do vote rises as participation falls. The second is a majority of whoever turns up. One word separates them and it changes the whole analysis.
Exchangeable interim financing
A controller funding its target between announcement and closing, through notes that convert into stock at a fixed price, is doing two things at once: supplying cash the company needs, and acquiring stock at a price set before the offer. If that price sits below what the shares are worth, every draw moves value — and the holders it moves value away from are exactly the ones whose approval the transaction requires.
Refusing an instrument, and doing it on the page
Declining a standard analysis is a legitimate and sometimes necessary act, but only if the reasons are given and the declined number is shown. The failure modes are omitting the analysis, and substituting a football field that lets a reader average two things which are not measuring the same object. Compute it, print it, and say in one sentence why it does not decide anything.
What Makes It Hard
The specific traps in this case — the places candidates lose the assessment without noticing.
Building a peer table because the template has room for one
Quoting a blended dollars per MHz-pop as the answer
Charging an obligation twice
Treating the exchangeable notes as debt and counting their shares
Confusing what the financing spends with what it moves
Building the vote matrix in one dimension
Choosing a counter instead of deriving one
Assuming a sensitivity moves the way sensitivities usually move
Check Your Answer
Type the figures you produced and find out how many are right before you open the worked answer. You get a verdict and, where you are off, a pointer to the part of the build to re-check — never the number itself. Everything you type stays on this device.
How to type a figure. Digits, with an optional unit: 1,234.5, $1,234.5, 2.6x, 21.4%. For a negative use (20.0) or -20.0. Enter as many decimals as you carried — precision is never penalised.
What the Case Asked For
The arithmetic is only half of it. Tick off what you actually produced — this half is yours to score, because nothing can grade a written recommendation from a checkbox.
The Model Answer
The worked answer in full: answer deck and Excel model, built the way a banker would actually build them. It is a reference, not a submission — a strong answer under the clock is far shorter.
What the Solution Covers
- —$/MHz-pop precedent spectrum acquisitions
- —EV/MHz-pop price ladder
- —Net present value of spectrum leases
- —Majority-of-the-minority vote analysis
- —Interim financing conversion dilution
- —Rejecting trading comparables with a reason
Answer Deck
Full model answer, banker-formatted
Upgrade to Diamond
Sign up and upgrade to Diamond to unlock the answer deck, the Excel model and the audio walkthrough.
Get StartedThe Excel Model
The model is linked and tied out end to end — every schedule, every formula and every check, in the file itself.
Downloads are available to Diamond members
Excel Model and PowerPoint Deck and Answer Deck (PDF) — yours to open, edit and rebuild
Walkthrough
A conversational walkthrough of how to approach the case under time pressure — where to start, what to cut, and how the recommendation gets defended.
Audio Walkthrough
How to approach Project Wyndmere — Spectrum Valuation & Minority Squeeze-Out
60-second preview — upgrade to Diamond for the full walkthrough
Frequently Asked Questions
Why would a valuation refuse a comparable companies analysis?
Because a peer multiple is a shortcut through three assumptions, and a valuation should check all three before taking it. First, that a peer set exists — companies whose assets, capital structure and earnings basis are close enough that the market's price for one is evidence about another. Second, that the earnings being capitalized are arm's length, because a multiple applied to a related-party transfer price capitalizes the transfer price. Third, that the assets generating those earnings are the assets you are valuing, because a multiple of current earnings prices an idle asset at zero no matter what it would fetch. When one of those fails you can usually adjust. When all three fail, the instrument is measuring something else, and the honest move is to say so on a page and to use the evidence base the asset actually trades on. Refusing is not the same as omitting: compute the multiple, print it, and let the reader see the number you are declining.
How is spectrum actually valued if not on a multiple?
On transactions, in dollars per MHz-pop. Spectrum changes hands constantly — in government auctions and in secondary transfers between carriers — and both are public, so unlike most assets there is a real, observable price series for the thing itself rather than for companies that happen to own it. The work is in making the comparison honest. You screen to the band, because low-band and millimeter wave are not the same commodity and trade orders of magnitude apart. You screen out transactions that conveyed more than the licenses, because a price that includes subscribers or a network is not a spectrum price. And then you adjust for the ways the licenses you are valuing differ from the ones that traded: the quality of the population covered, whether the interest is owned or leased, what obligations ride with it, and how long it lasts.
Why does the population covered matter as much as the bandwidth?
Because a megahertz is only worth what the people under it are worth. Spectrum earns its value from traffic, and traffic is concentrated: the largest metropolitan markets carry far more of it per person than rural areas, and capacity is scarce there in a way it is not elsewhere. So two portfolios with identical MHz-pop totals can be worth materially different amounts if one is weighted to dense markets and the other is not. The practical difficulty is that this adjustment is a judgment. There are rarely enough transactions in a band to fit a coefficient with any confidence, and presenting one fitted to a handful of observations as though it were evidence is worse than declaring it. The defensible approach is to state the parameter, show the correlation the data actually supports, and sensitize the answer across a range.
What is the difference between a majority of the minority struck on shares outstanding and one struck on shares voted?
It is the difference between a condition that binds and one that mostly does not. Struck on shares OUTSTANDING, the condition requires a majority of every unaffiliated share in existence, so abstentions and unvoted shares count as no. If turnout among unaffiliated holders is high the hurdle is close to fifty percent of those voting; if turnout is low the support required from the shares that do vote climbs steeply, and at a low enough turnout it becomes unreachable. Struck on shares VOTED, the condition asks only for a majority of whoever participates, and a low turnout makes it easier rather than harder. The right way to present this to a committee is a two-dimensional matrix — turnout against support — because the boundary runs diagonally and a one-dimensional view hides half of it. And it is worth reading the register before making any assumption at all: a small number of large holders can settle the question arithmetically.
Why does interim financing from the buyer matter to a special committee?
Because it changes the price of the thing being negotiated while the negotiation is happening, and the buyer controls the pace. A controller lending to its target through notes that convert at a fixed price is acquiring equity on terms set before the offer. If that conversion price sits below what the shares are worth, every draw transfers value from the existing holders to the lender — and if the lender is also the buyer, the holders it comes from are the ones whose approval the transaction requires. Two things follow. The committee's analysis should distinguish the cash the company actually consumes from the value the conversion merely reallocates, because they are different in kind. And the committee should notice what its minority-approval condition does and does not protect: the shares the conversion issues belong to the controller and are excluded from the minority either way, so the condition is indifferent to the dilution. It protects the process, not the price — which is an argument for negotiating the conversion terms alongside the headline number rather than after it.
How do you derive a counter rather than choosing one?
By finding a price that answers a question, and then rounding it in the direction that keeps the answer true. A counter pulled from a range, or set at a round premium to a market price the analysis has just spent three pages telling the reader not to anchor on, is a number somebody picked; a reviewer sees that immediately. A derived counter comes out of a stated condition — the price at which a specific unfairness disappears, or at which the consideration reaches a value the committee can defend — and it should be solvable in closed form wherever the algebra allows, because a model that inverts is one a reader can follow and a checker can assert exactly. Then round it: to a negotiable increment, and upward if the number is a bound rather than a measurement, because rounding a floor down states a price the analysis does not support. Finally, if the counter depends on a non-price term to be worth what it says, that term is part of the recommendation and belongs in the same sentence as the number.
Why would a higher discount rate ever increase a valuation?
Because the rate is only attached to some of the lines. In a conventional discounted cash flow the rate discounts the asset, so raising it lowers the value. Here the asset is valued off transactions rather than off a cash flow, so it is not discounted at all; the rate touches the obligations that ride with the licenses, and it truncates a leasehold. Raising it therefore shrinks the liabilities and — because a fixed-term interest represents a larger share of a perpetuity when the far future is discounted harder — makes the leasehold a larger fraction of a perpetual license. Both effects push the same way. Before reading a sensitivity, work out which lines the variable is attached to. If you cannot explain the sign your own grid produces, either the grid is wrong or your mental model of the valuation is, and it is worth knowing which.
About This Telecom / Spectrum Squeeze-Out Case Study
Telecom / Spectrum Squeeze-Out case study for investment banking interviews. 120-minute format covering $/mhz-pop precedent spectrum acquisitions, ev/mhz-pop price ladder, net present value of spectrum leases. Includes the full prompt, a model answer deck, a tied-out Excel model and an audio walkthrough.
This case study sits in Investment Banking, under Media & Telecom. Every case ships with the full prompt, the supporting materials, a complete model answer and an audio walkthrough of the judgment behind the recommendation.
120-Minute Format
The time limit a real assessment would give you
Answer Deck
Included in the model answer
Excel Model
Included in the model answer
Audio Walkthrough
How to approach the case under time pressure
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