lecture 3 part 2 Flashcards
what are motivations for m&a
increased value through the combination of these two companies
synergies between these two companies unlocks value
what are the types of takeovers
friendly acquisition and hostile acquisition
what is a friendly acquisition
the company actually wants to be bought out
what are the steps for a friendly acquisition
- confidentiality agreement
- sign letter of intent
- due diligence (process of evaluating a target company)
- final sale
what is a hostile acquisition
company doesn’t want to be bought out
what is an example of a hostile acquisition
tender offer
what is a tender offer
purchase company buys shares from shareholders till they are at 50.1% ownership and control the company
what are the three board classifications of mergers and acquisituions
horizontal merger, vertical merger and cross - border merger
what is a horizontal merger and give an example
two firms in the same industry merge, td and canada trust
what is a vertical merger and give an example
two companies merge that operate on different stages on the same supply chain
what is a cross - border merger
a merger or acquisition involving a canadian firm and a foriegn firm
what is a takeover
the transfer of ownership from one ownership group to another
what is an acquisition
the purchase of one firm by another
what is a merger
the combinations of two firms into a new legal entity
what are the 3 financing takeovers
cash transactions, share transactions going private transactions
what are cash transactions
cash for shares in a company
what is share transactions
cash and shares for shares in a company
what is going private transactions
an acquisition where the purchaser already owns a majority stake in the takeover company
what are the critical shareholder percentages and names
- 10% early warning
- 20% takeover bid
- 50.1% control
- 66.7 amalgamation
- 90% minority squeeze - out
what is the early warning mean
become a potential buyer
what does takeover bid mean
must disclose all intentions and actions
what does control mean
control voting decisions
what does amalagtion mean
can make all the decisions by yourself
what does minority squeeze - out mean
anyone going against you may be forced to sell their share
