1 / 28

MERGERS & ACQUISITIONS

MERGERS & ACQUISITIONS. Leonid Sopotnitskiy. Part 1. Restructuring a business. Restructuring activities. Acquisitions Mergers Strategic alliances Demergers Divestitures. Friendly Hostile Takeover. Vertical Horizontal Congeneric Conglomerate Accretive Dilutive. Spin-out

Télécharger la présentation

MERGERS & ACQUISITIONS

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. MERGERS & ACQUISITIONS Leonid Sopotnitskiy

  2. Part 1 Restructuring a business

  3. Restructuring activities • Acquisitions • Mergers • Strategic alliances • Demergers • Divestitures • Friendly • Hostile • Takeover • Vertical • Horizontal • Congeneric • Conglomerate • Accretive • Dilutive • Spin-out • Spin-off • Disposal • Joint Ventures • Minor investments • Franchising • Licensing

  4. Cheaper transaction Gain control via majority stake Triple taxation Minority resistance Ineffective managerial decisions Holding companies in M&A +VS- 66% INEFFECTIVE 2 to 3

  5. ESOP(Employee Stock Ownership Plan) ESOP-Fund 4. Finance 1. Loan 3. Shares 5. Interest Creditor SPONSOR 2. Guarantee

  6. ESOP as an M&A-tool “Shell” company ESOP-Fund 4. Finance 3. Shares Subsidiary SHARES 1. Loan 5. Interest Creditor Parent Co. 2. Guarantee

  7. Part 2 Participants

  8. Investment Bankers • Deal clarification • Consulting services • IPO

  9. Lawyers • Corporate law • Antimonopoly law • M&A code • Tax law • Pension planning • Real-estate law • Securities • Court experts

  10. Other participants • Accountants • Proxy-hunters • PR-agents • Institutional investors (pension funds, insurance companies, etc.) • Arbitrage traders (a.k.a. “Arbs”)

  11. Short “shark” Buy “shark” Sell target Long target Arbitrage trading SPI 70 + 10 60 + 20 40 t Takeover announcement Deal successful Shares converted (1Q) (3Q)

  12. Part 3 HQ behind the scenes

  13. Synergy • Operational effect • Financial effect 1 + 1 = 3

  14. Market leadership Strategy realignment Taxes Cross-selling Empire building Managers’ hubris Diversification Undervalued assets (q-ratio) Common stimuli

  15. Why do M&A deals fail? • Overestimated synergy • Low integration tempo • Bad strategy • Cultural conflicts • Core-business conflicts • Oversized targets • Careless deal clearance (by investment bankers) • Financing errors

  16. Part 4 Acquisitions & takeovers

  17. Friendly acquisitions • Voluntary General Offering (VGO) • Deal through board negotiations • Willfulness of both parties • Late announcements + - • Lack of surprise • Preliminary SPI-growth risk

  18. Hostile approach Premium per share Board Complement Equity structure Corporate regulations Defense analysis Factor complexity S U C C E S S

  19. Black Knight in action • Dodging board negotiations • Direct shareholder contact • Proxy-fighting (becoming a trustee) • Preliminary press-release • Psychological pressure on the board directors • Various takeover strategies & tactics

  20. Takeover strategies • “Bear hug” • Proxy battles • Pre-tender concealed buying spree • Tender offer • Toehold strategy

  21. Takeover decision tree Friendly LOI Aggressive actions Y N Bear hug Negotiations Refusal N Y Negotiations Proxy battle Y Renegotiate Tender offer Open market Court Fulfill offer Complex N

  22. Reverse takeovers(APO) • Avoid IPO expenses • 12-months’ procedure (i.e. time-saving tool) • Fundamental changes in business • Search for an effective floating mechanism

  23. PLC PIPE deals (Private Investment in Public Equity) PRIVATE INVESTOR M A R K E T

  24. Part 5 Defense mechanism

  25. Poison pills Shark repellents Golden & silver parachutes Green mail Pac-man defense White knight ESOP Leveraged recapitalization Possible measures

  26. “Poison pills” • Preferred stock plan • Flip-over rights plan (discount option) • Ownership flip-in plan (1:1 exchange option) • Back-end rights plan • Poison put

  27. Preferred stock plan 18,5% 25% BLACK KNIGHT TARGET DEAL MARKET 1:1,06 S S S S P S P S P 18,5% 25% 18,5% 25% 18,5% 25% 8,3% 33% 8,3% 33% 8,3% 33% 1 000000 shares 943 396 shares + 500 000 P 1 943396 shares 1 000000 shares 74 % VS 26 %

  28. To be continued… Thank you!

More Related