ACCT3013 Lecture 11: Week 11 Mergers & Acquisitions
Document Summary
Equity combinations: equity combinations: equity transactions between two organisations that buy out or exchange shares, with only one entity remaining. Focus on cross-border m&a activity aims to consolidate industries worldwide. Forms and motives of m&a: friendly bidding, the (cid:271)idde(cid:396) i(cid:374)fo(cid:396)(cid:373)s the ta(cid:396)get"s (cid:271)oa(cid:396)d of di(cid:396)e(cid:272)to(cid:396)s of its intentions. Defences against hostile bidding to increase shareholder value. Active defences against acquisition: cyanide pill: take on large amounts of debt with a clause to make all debt immediately payable when the organisation is acquired acquirer must come up with significantly more cash than budgeted for. In the extreme, the target may even prefer to file for chapter 11 voluntary. Lady macbeth: a white knight turning into a dark knight (stabbing the target in the back): greenmail: blackmail the acquirer by buying off its shares, thus forcing the acquirer to buy-back its own shares at a premium.
