Mergers, acquisitions, and corporate restructurings

✍ Scribed by Patrick A. Gaughan

• Publisher: Wiley
• Year: 2007
• Tongue: English
• Leaves: 639
• Edition: 4
• Category: Library

✦ Synopsis

Modern restructuring techniques for a global business landscape Corporate restructurings are an indispensable tool in building a new generation of re-engineered companies with the power and resources to compete on a global playing field. Written from a practical and historical perspective, Mergers, Acquisitions, and Corporate Restructurings, Fourth Edition carefully analyzes the strategies and motives that inspire M&As, the laws and rules that govern the field, as well as the offensive and defensive techniques of hostile acquisitions. In this thoroughly revised Fourth Edition, author and business valuation expert Patrick Gaughan provides a fresh perspective on M&As in today's global business landscape, and how your company can reap the benefits from the various forms of restructurings available. Packed with the most up-to-date research, graphs, and case studies, Mergers, Acquisitions, and Corporate Restructurings, Fourth Edition explores: * Recent takeover trends including the role of private equity firms and hedge funds * Most effective offensive and defensive tactics in hostile bids * A review of the effect of shareholder wealth on a variety of takeover actions * Modern, historical, and global perspectives on the field * The various forms of downsizing including divestitures, spinoffs, and equity carve-outs * Bankruptcy as an effective restructuring technique * Latest developments in corporate governance * Pros and cons of joint ventures and strategic alliances * Primary methods used to value public and private companies

✦ Table of Contents

MERGERS, ACQUISITIONS, AND CORPORATE RESTRUCTURINGS, FOURTH EDITION......Page 5
CONTENTS......Page 7
PREFACE......Page 13
ABOUT THE WEB SITE......Page 15
PART 1: BACKGROUND......Page 19
RECENT M&A TRENDS......Page 21
VALUING A TRANSACTION......Page 30
TYPES OF MERGERS......Page 31
MERGER FINANCING......Page 32
MERGER PROFESSIONALS......Page 33
MERGER ARBITRAGE......Page 34
LEVERAGED BUYOUTS AND THE PRIVATE EQUITY MARKET......Page 35
CORPORATE RESTRUCTURING......Page 36
MERGER NEGOTIATIONS......Page 37
MERGER APPROVAL PROCEDURES......Page 39
SHORT-FORM MERGER......Page 40
PURCHASE OF ASSETS COMPARED WITH PURCHASE OF STOCK......Page 41
ADVANTAGES OF ASSET ACQUISITIONS......Page 42
REVERSE MERGERS......Page 43
HOLDING COMPANIES......Page 44
WHAT CAUSES MERGER WAVES?......Page 47
FIRST WAVE, 1897–1904......Page 48
SECOND WAVE, 1916–1929......Page 54
THE 1940s......Page 57
THIRD WAVE, 1965–1969......Page 58
TRENDSETTING MERGERS OF THE 1970s......Page 65
FOURTH WAVE, 1984–1989......Page 71
FIFTH WAVE......Page 77
SUMMARY......Page 85
CHAPTER 3: LEGAL FRAMEWORK......Page 87
SECURITIES LAWS......Page 88
OTHER SPECIFIC TAKEOVER RULES IN THE UNITED STATES......Page 102
INTERNATIONAL SECURITIES LAWS RELATING TO TAKEOVERS......Page 103
BUSINESS JUDGMENT RULE......Page 109
STATE ANTITAKEOVER LAWS......Page 110
REGULATION OF INSIDER TRADING......Page 116
ANTITRUST LAWS......Page 118
RECENT TRENDS IN ANTITRUST ENFORCEMENT IN THE UNITED STATES......Page 125
MEASURING CONCENTRATION AND DEFINING MARKET SHARE......Page 127
ANTITRUST REMEDIES......Page 132
SUMMARY......Page 134
GROWTH......Page 135
SYNERGY......Page 142
OPERATING SYNERGY......Page 144
DIVERSIFICATION......Page 154
OTHER ECONOMIC MOTIVES......Page 163
HUBRIS HYPOTHESIS OF TAKEOVERS......Page 175
OTHER MOTIVES......Page 181
SUMMARY......Page 183
PART 2: HOSTILE TAKEOVERS......Page 187
CHAPTER 5: ANTITAKEOVER MEASURES......Page 189
MANAGEMENT ENTRENCHMENT HYPOTHESIS VERSUS STOCKHOLDER INTERESTS HYPOTHESIS......Page 190
PREVENTATIVE ANTITAKEOVER MEASURES......Page 191
CHANGING THE STATE OF INCORPORATION......Page 214
ACTIVE ANTITAKEOVER DEFENSES......Page 215
INFORMATION CONTENT OF TAKEOVER RESISTANCE......Page 249
SUMMARY......Page 251
CHAPTER 6: TAKEOVER TACTICS......Page 252
PRELIMINARY TAKEOVER STEPS......Page 254
TENDER OFFERS......Page 258
OPEN MARKET PURCHASES AND STREET SWEEPS......Page 276
ADVANTAGES OF TENDER OFFERS OVER OPEN MARKET PURCHASES......Page 278
PROXY FIGHTS......Page 281
SUMMARY......Page 299
PART 3: GOING PRIVATE TRANSACTIONS AND LEVERAGED BUYOUTS......Page 301
TERMINOLOGY......Page 303
HISTORICAL TRENDS IN LBOs Early Origins of LBOs......Page 304
COSTS OF BEING A PUBLIC COMPANY......Page 313
MANAGEMENT BUYOUTS......Page 315
CONFLICTS OF INTEREST IN MANAGEMENT BUYOUTS......Page 317
FINANCING FOR LEVERAGED BUYOUTS......Page 327
CAPITAL STRUCTURE OF LBOs......Page 332
SOURCES OF LBO FINANCING......Page 333
RETURNS TO STOCKHOLDERS FROM DIVISIONAL BUYOUTS......Page 335
REVERSE LBOs......Page 337
EMPIRICAL RESEARCH ON WEALTH TRANSFER EFFECTS......Page 342
PROTECTION FOR CREDITORS......Page 343
SUMMARY......Page 346
CHAPTER 8: TRENDS IN THE FINANCING OF TAKEOVERS AND GOING PRIVATE TRANSACTIONS INCLUDING HEDGE FUNDS AND PRIVATE EQUITY FUNDS......Page 348
TRENDS IN CASH VERSUS STOCK PERCENTAGE OF TAKEOVER FINANCING......Page 349
SHAREHOLDER WEALTH EFFECTS AND METHODS OF PAYMENT......Page 353
PRIVATE EQUITY MARKET......Page 358
HEDGE FUNDS......Page 366
COMPARISON OF PRIVATE EQUITY FUNDS AND HEDGE FUNDS......Page 370
HEDGE FUND AND PRIVATE EQUITY FUND CONVERGENCE......Page 371
JUNK BONDS FINANCING OF TAKEOVERS......Page 373
STAPLED FINANCING......Page 391
SECURITIZATION AND M& A FINANCING......Page 392
SUMMARY......Page 393
HISTORICAL GROWTH OF ESOPs......Page 396
CHARACTERISTICS OF ESOPs......Page 398
CORPORATE FINANCE USES OF ESOPs......Page 399
CASH FLOW IMPLICATIONS......Page 401
PUT OPTIONS OF ESOPs......Page 402
ESOPs VERSUS A PUBLIC OFFERING OF STOCK......Page 403
EMPLOYEE RISK AND ESOPs......Page 405
TAX BENEFITS OF LESOPs......Page 406
DRAWBACKS OF LESOPs......Page 407
ESOPs AND CORPORATE PERFORMANCE......Page 408
ESOPs AS AN ANTITAKEOVER DEFENSE......Page 410
ESOPs AND SHAREHOLDER WEALTH......Page 411
ESOPs AND LBOs......Page 412
SUMMARY......Page 415
PART 4: CORPORATE RESTRUCTURING......Page 417
CHAPTER 10: CORPORATE RESTRUCTURING......Page 419
DIVESTITURES......Page 421
DIVESTITURE AND SPINOFF PROCESS......Page 431
WEALTH EFFECTS OF SELLOFFS......Page 439
EQUITY CARVE-OUTS......Page 452
VOLUNTARY LIQUIDATIONS, OR BUSTUPS......Page 455
TRACKING STOCKS......Page 457
MASTER LIMITED PARTNERSHIPS AND SELLOFFS......Page 458
SUMMARY......Page 460
TYPES OF BUSINESS FAILURE......Page 461
SUMMARY......Page 495
LIQUIDATION......Page 489
CORPORATE CONTROL AND DEFAULT......Page 488
WORKOUTS......Page 483
PREPACKAGED BANKRUPTCY......Page 480
BENEFITS OF THE CHAPTER 11 PROCESS FOR THE DEBTOR......Page 477
REORGANIZATION PROCESS......Page 472
REORGANIZATION VERSUS LIQUIDATION......Page 471
U.S. BANKRUPTCY LAWS......Page 470
BANKRUPTCY TRENDS......Page 464
CAUSES OF BUSINESS FAILURE......Page 462
FAILED CORPORATE GOVERNANCE: ACCOUNTING SCANDALS......Page 497
SARBANES-OXLEY ACT......Page 499
OTHER REGULATORY CHANGES......Page 500
CORPORATE GOVERNANCE......Page 501
SUMMARY......Page 535
CONTRACTUAL AGREEMENTS......Page 537
SUMMARY......Page 548
GOVERNANCE OF STRATEGIC ALLIANCES......Page 544
COMPARING STRATEGIC ALLIANCES AND JOINT VENTURES WITH MERGERS AND ACQUISITIONS......Page 538
CHAPTER 14: VALUATION......Page 549
MANAGING VALUE AS AN ANTITAKEOVER DEFENSE......Page 551
BENCHMARKS OF VALUE......Page 552
HOW THE MARKET DETERMINES DISCOUNT RATES......Page 563
TAKEOVERS AND CONTROL PREMIUMS......Page 573
MARKETABILITY OF THE STOCK......Page 575
VALUATION OF STOCK-FOR-STOCK EXCHANGES......Page 584
EXCHANGE RATIO......Page 585
DESIRABLE FINANCIAL CHARACTERISTICS OF TARGETS......Page 593
SUMMARY......Page 601
APPENDIX......Page 602
FINANCIAL ACCOUNTING......Page 606
TAXABLE VERSUS TAX-FREE TRANSACTIONS......Page 607
TAX CONSEQUENCES OF A STOCK-FOR-STOCK EXCHANGE......Page 609
ASSET BASIS STEP-UP......Page 612
CHANGES IN THE TAX LAWS General Utilities Doctrine......Page 613
ROLE OF TAXES IN THE MERGER DECISION......Page 614
TAXES AS A SOURCE OF VALUE IN MANAGEMENT BUYOUTS......Page 616
MISCELLANEOUS TAX ISSUES Taxes and Golden Parachutes......Page 617
SUMMARY......Page 618
GLOSSARY......Page 619
INDEX......Page 627