A Conversation Among Four Business Colleagues Discussing a Takeover Proposal - IELTS Listening Sample Answer

The IELTS Listening section consists of four sections with two conversations and two monologues. There are a total of forty questions in IELTS Listening. This sample is section three of IELTS Listening which is a conversation among four business colleagues discussing a takeover proposal. There are similar topics found in IELTS Listening practice papers. This section contains the following question type:

• Complete the table
• Multiple choice

Audio Transcript

You will hear four business colleagues discussing a takeover proposal.

Mary: So ... let's go over this again. We don't want to make any mistakes and we all need to agree we're making the right decision.

John: Absolutely; we'd have to spend a lot of money to buy Bizz-Educators Inc.; almost £10 million. So let's get this right, otherwise it'll be our necks on the line.

Dave: Well, I for one think this is an excellent opportunity for our company to expand and break into a new market, I say we should go ahead with the takeover. At £10 million, Bizz-Educators is good value for money.

Mary: Ok Dave, I know you're very much in favour of the acquisition. How about you summarise the plus points of this venture for us. Mark, you're less certain and you've highlighted some issues already. Will you summarise the downsides?

Mark: I'd be only too happy to.

John: Right then, Dave, let's start with you. Why is this proposal so attractive? What are the upsides?

Dave: It's simple economics. Bizz-Educators has a proven track record and is an industry leader. It is a well-respected company with a great name, has generated excellent goodwill, and has consistently made a gross profit of more than £500,000 per annum with a great shareholder return,

Mark: Yeah, but what about the net profit? That's not nearly as high. In fact, last year it made a net loss of £100,000.

Dave: Mark, that's only because it invested in a new manufacturing plant. That's a long-term investment to secure the company's future. In fact, it's a good thing, not a bad thing. It shows that the company has a clear and ambitious strategy going forward. Besides, a £100,000 loss is very small in real terms. It's hardly worth being concerned about. That loss will be clawed back within two years if the projected profits for 2012 and 2013 materialise. The forecast is for a net profit of £500.000 in 2012 and £1,000,000 in 2013. The figures speak for themselves. This is a sound investment.

John: I have to agree with Dave. Why are you so sceptical Mark? Mark: I see where Dave is coming from, but we're overlooking some vital facts. First of all, this company wants to remain an independent entity. Hostile takeover bids are fraught with danger. We know from experience; remember Davidsville Inc.? We spent a fortune researching that company and creating a workable business plan only for the merger to fall through.

Mary: Mark's right, it is always difficult to buy a company that doesn't want to be sold. Davidsville was a disaster. Continue Mark.

Mark: That's not my only concern. I am also worried that Bizz-Educators is a production-based company. We have no experience running companies like that. Our market is investment banking and trading. We would have to hire outside managers to run Bizz-Educators for us. That's going to cost more money. Look, I'm not saying it can't be done; I'm just saving this is a high-risk venture. Plus there's no synergy. Our business is totally different, so we can't save costs by combining departments.

John: Well, we can certainly see that this decision is not straightforward, by any means.

Mary: Maybe, but we have to come to a conclusion soon; it's almost five o'clock.

Mark: What's the hurry? Can't we postpone our decision and discuss the takeover proposal again tomorrow?

Mary: Mark, have you forgotten that we have to have our conclusions ready for tomorrow's board meeting? That's when the official decision will be made.

Dave: Goodness, it almost slipped my mind. Well, we'd best move on. Mary, John, you were uncertain before. Now that you've listened to the pros and cons of the proposal, what do you think?

John: I think it's a great opportunity for our business. Bizz-Educators Is definitely profitable and it is a business on the up, it's growing and is a very attractive takeover proposition for that reason.

Mary: No-one doubts that it's a very successful business, but the question is should we invest? I say we should, provided we can guarantee the following: First of all, I would like assurances that the management of Bizz-Educators won't oppose us outright. That would make the bid too difficult. Secondly, I think we need to ask an independent mediator to broker the deal on our behalf. Last time we tried to negotiate our own takeover it was a disaster, as Mark said.

John: I agree Mary. I'd also like us to carry out another audit of the company's books.

Mark: In fairness John, I don't think that's necessary. We've done a thorough audit already. It'll just cost more money. We must keep the deal secret until it goes through though: if this gets leaked to the press, Bizz-Educators won't be happy. That will make the management even more hostile towards us.

Dave: Good point, agreed. I don't think we need to be concerned about projected profit margins, goodwill, or accounting issues. Bizz-Educators has kept very up-to-date account books,

Mary: Great, then we're all agreed the takeover should go ahead provided we proceed cautiously.

That is the end of Part three.

Questions 21-27

Complete the table below.

Write NO MORE THAN THREE WORDS AND/OR A NUMBER for each answer.

Question 21.

Answer: leader

Explanation: When John asks Dave about the upsides of the proposal he replied, “Bizz-Educators has a proven track record and is an industry leader”. Therefore ‘leader’ is the answer.

Also, check:

Question 22.

Answer: 500,000

Explanation: Dave mentions another upside of the proposal that it has consistently made a gross profit of more than £500,000 per annum. Hence ‘500,000’ should be the answer.

Question 23.

Answer: strategy

Explanation: As stated by Dave, “It shows that the company has a clear and ambitious strategy going forward”, the answer ‘strategy’.

Question 24.

Answer: projected profits

Explanation: Following the conversation, we can hear Dave saying, “That loss will be clawed back within two years if the projected profits for 2012 and 2013 materialize. Therefore the answer should be projected profits.

Question 25.

Answer: takeover bids

Explanation: John asks Mike about him being skeptical about the proposal to which Mike replied, “Hostile takeover bids are fraught with danger.” Hence the answer must be ‘takeover bids.’

Question 26.

Answer: high-risk

Explanation: As stated by Mark, “I'm just saving this is a high-risk venture.” The answer is high-risk.

Question 27.

Answer: board meeting

Explanation: When Mark said about discussing the proposal again tomorrow, Mary reminds him by saying “Mark, have you forgotten that we have to have our conclusions ready for tomorrow's board meeting? That's when the official decision will be made”, the correct answer must be ‘board meeting’.

Questions 28-30

Choose THREE letters, A-G. Write answers next to 28-30 on your answer sheet.

What THREE requirements are there for the takeover of Bizz-Educators to go ahead?

1. Assurances that the management of Bizz – Educators won’t oppose the deal.
2. An independent mediator is used to broker the deal.
3. An adult of the company’s books.
4. That a study of the company’s projected profit margin is conducted.
5. That the deal is kept secret until it is finalized.
6. That analysis of the company’s goodwill assets be carried out.
7. That the asking price is lowered.

Question 28.

Answer: A

Explanation: Following the conversation, we can hear Marry mentioning “I would like assurances that the management of Bizz-Educators won't oppose us outright”. According to this, the answer is A.

Question 29.

Answer: B

Explanation: The second requirement mentioned by Marry for the takeover of Bizz-Educators is to ask an independent mediator to broker the deal on their behalf. Therefore, the answer must be B.

Question 30.

Answer: E

Explanation: We can hear Mark saying that “We must keep the deal secret until it goes through though” so the answer here is E.