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 FM handouts

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Thomas Tangian


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Join date : 2008-06-12
Location : Davao

PostSubject: FM handouts   Sun Mar 29, 2009 10:45 pm

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PostSubject: Re: FM handouts   Mon Mar 30, 2009 1:25 am

Mergers and Acquisitions: DOING THE DEAL

When the CEO and top managers of a company decide that they want to do a merger or acquition form ohter company, they start with a tender offer.
The process typically begins with thw acquiring company carefully and discretely buyinh up shares in the target company, or building a position.

The Target's Response

Accept the terms of the offer - the target company will accept the tender offer of the accquiring company.

Attemtp to neogtiate - the target company may not satisfy of the tender offer of the acquiring company, so they try to work out more agreeable terms let them keep their jobs or even better, send them off with a nice, big compensation package.

Execute a Poison Pill or Some other hostile takeover defense - the target company grants all shareholders except the acquirng company, options to buy additional stock at a dramatic discount. This dilutes the acquring company's share and intercepts its control of the company.

Find a white knight - as an alternative, the target company's management may seek out a friendlier potential acquiring compnay, or white knoght. If a white knight is found, it will offer or higher price for the shares than the hostile bidder.

Closing the Deal

Once the target company agrees to the tender offer and regularory requirements are met, the merger deal will be executed by means of some transcation.
The accquring company may pay the target company with cash or stocks.

Mergers and Acquisitions: BREAK UPS

Disadvatage of break ups is that said, de-merged firms are likely to be substantially smaller that their parents, possibly making it harder to tap credit market and
costlier finance that may be affordable only for larger companies.

Advantage of break ups is that it can help a company raise additional equity funds. A break up can also boost a compnay's valuation by providing powerful incentives to the people who work in the separiting unit, and help the parent's management to focus on one operation.

Restructuring Methods

There are several restructuring methods, each has advantages and disadvantages for compnies and invetors. These are the different methods:

Equiity Carve-Outs
Tracking Stock

Compiled by: Harley E. Lovitos[right]
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Michelangelo Macaraeg


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Join date : 2008-06-13
Age : 28
Location : Davao City

PostSubject: Re: FM handouts   Tue Mar 31, 2009 5:32 pm

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