M&A Flashcards
1
Q
Types of takeover?
A
Strategic (Horizontal/Vertical), Financial, Conglomerate Mergers
2
Q
Why do you do selloff?
A
Cash receit
3
Q
What is the difference between a carveout and spinout?
A
carve out generates cash
spin off - no cash
both create new legal entities
4
Q
takeover payment with stock vs cash
A
shares seem less favorable because of negative signal (POT) + shows inability to raise cash through debt
5
Q
why does cash offer > stock offer?
A
because of capital gains tax
6
Q
why do firms takeover for tax reasons?
A
1) unsued debt capacity
2) capital allowances
3) adding leverage to prevent takeover can be seen in targets
