The document discusses corporate takeovers, defenses against takeovers, and factors affecting corporate governance. It covers common takeover tactics like friendly deals, hostile bids, and proxy contests. It also discusses takeover defenses that targets employ, such as poison pills, staggered boards, and supermajority provisions. Additionally, it examines how legislation, regulators, institutional investors, and the market for corporate control influence corporate governance.
Information on current issues involved with serving on a creditor committee. Topics include committee formation, pros, duties, areas of involvement, etc.
Presentation by Maurice Blackburn head of Superannuation John Berrill to the Association of Superannuation Funds of Australia (ASFA) National Conference, Melbourne, 2014.
View John's profile: http://www.mauriceblackburn.com.au/our-people/lawyers/john-berrill/
Information on current issues involved with serving on a creditor committee. Topics include committee formation, pros, duties, areas of involvement, etc.
Presentation by Maurice Blackburn head of Superannuation John Berrill to the Association of Superannuation Funds of Australia (ASFA) National Conference, Melbourne, 2014.
View John's profile: http://www.mauriceblackburn.com.au/our-people/lawyers/john-berrill/
SkyLaw's Kevin West was pleased to be invited to speak once again this year at the annual conference for Governance Professionals of Canada (formerly CSCS) in Whistler, British Columbia on the role of the board of directors in M&A transactions and other special situations. Kevin participated on a panel with Deborah Rosati, an experienced corporate director and founder of Women Get On Board, and Thierry Keable, the General Counsel for Whistler Blackcomb.
Critical Issues in Governance:The Role of the Board in Special SituationsDeborahRosati
Presented by Deborah Rosati, Kevin West and Thierry Keable at the Governance Professionals of Canada's 18th Annual Corporate Governance Conference in Whistler, B.C., August 2016.
In this presentation, FMC's Gary Sollis, discusses the top ten tips for a successful M&A. Areas addressed include: protecting the company through confidentiality agreements, the effective use of a special committee, financing the deal, responding to an unsolicited offer, structuring the deal, the pros and cons of shares vs. cash, minimizing non-completion risks, when to break free, protecting directors and officers as well as avoiding trouble with regulators.
Funding 101 for Tech Entrepreneurs & StartupsRoger Royse
Roger Royse, founder of the Royse Law Firm, discusses the various options available to entrepreneurs when it comes to funding their startup.
Topics include:
1) What are the best funding options for entrepreneurs to scale their business?
2) When should entrepreneurs pursue external funding?
3) How do entrepreneurs choose the right investor?
4) What alternative sources of funding are available?
5) How and why should a founder stage their funding rounds?
6) When should a founder think about exiting?
7) How can advisors help with the funding process?
RESTRUCTURING, INSOLVENCY & TROUBLED COMPANIES 2022: Bad Debtor Owes Me Money!Financial Poise
Sometimes it begins when a client, tenant, or customer starts to slow-pay, with the result that your accounts receivable start to accrue gradually. Other times the issue presents itself more suddenly. Either way, you find your company owed a great deal of money that looks like it may not be collected because your client/tenant/customer has filed bankruptcy, has commenced an assignment for the benefit of creditors, has been put into receivership, or is otherwise just plain insolvent. What do you do? What should you not do? The topics discussed in this webinar include the pros and cons of putting a counterparty into involuntary bankruptcy; when and how you may be able to pursue third parties (like guarantors, directors, or officers) for the amount owed; risks related to preference attack; pros and cons of sitting on a “creditors’ committee” in a Chapter 11; how to negotiate for “critical vendor” protection in Chapter 11; and practical guidance for continuing to provide goods or services to an insolvent counterparty.
Part of the webinar series: RESTRUCTURING, INSOLVENCY & TROUBLED COMPANIES 2022
See more at https://www.financialpoise.com/webinars/
Incorporation Stage Issues and Seed Financings Overview w/ Kristine Di BaccoStanford Venture Studio
Which legal entity is best for your startup company? How should you deal with founder stock and other incorporation issues? How should you structure a seed investment? Kristine Di Bacco, Partner at Fenwick & West, will help you answer these important questions, and others, as you think about the process of incorporating and raising seed financing.
In April 2014, I prepared and presented this seminar for senior bankers and investment professionals in Dubai in collaboration with A&Z Consultants, Dubai, UAE.
I am sharing this here here for everyone's benefit.
Best regards,
Bilal Hasanjee
Presentation on reflective loss in corporate law and investor-state dispute settlement by Professor Eilís Ferran of the University of Cambridge.
OECD-hosted Freedom of Investment (FOI) Roundtable:
www.oecd.org/daf/inv/investment-policy/foi.htm
Sometimes It Begins When A Client, Tenant, Or Customer Starts To Slow-Pay, With The Result That Your Accounts Receivable Start To Accrue Gradually. Other Times The Issue Presents Itself More Suddenly. Either Way, You Find Your Company Owed A Great Deal Of Money That Looks Like It May Not Be Collected Because Your Client/Tenant/Customer Has Filed Bankruptcy, Has Commenced An Assignment For The Benefit Of Creditors, Has Been Put Into Receivership, Or Is Otherwise Just Plain Insolvent. What Do You Do? What Should You Not Do? The Topics Discussed In This Webinar Include The Pros And Cons Of Putting A Counterparty Into Involuntary Bankruptcy; When And How You May Be Able To Pursue Third Parties (Like Guarantors, Directors, Or Officers) For The Amount Owed; Risks Related To Preference Attack; Pros And Cons Of Sitting On A “Creditors’ Committee” In A Chapter 11; How To Negotiate For “Critical Vendor” Protection In Chapter 11; And Practical Guidance For Continuing To Provide Goods Or Services To An Insolvent Counterparty.
Part of the webinar series: Restructuring, Insolvency & Troubled Companies 2021
See more at https://www.financialpoise.com/webinars/
Dodd-Frank Compliance and Technology Summer Meeting 2013Jeffrey C.Y. Li
Atlas Communications Technology recently co-sponsored the Dodd-Frank Compliance and Technology Summer Meeting. The presentation was an introduction to the complexities of the Dodd-Frank Wall Street Reform and Consumer Protection Act, what firms need to do to bring themselves into compliance, and the technology that can help enterprises meet the stringent demands of the act.
For more information about this conference, or to learn about our Fall meeting in September featuring one of the authors of the act, Congressman Jim Himes, please call 1-855-Dodd Frank (1-855-363-3372) for any questions, or if you wish to talk to one of our presenters today to talk about taking the next steps towards Dodd-Frank Compliance
Atlas Presentation 2013 07-09 dodd-frank summer meeting v1-0 (for online)
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
SkyLaw's Kevin West was pleased to be invited to speak once again this year at the annual conference for Governance Professionals of Canada (formerly CSCS) in Whistler, British Columbia on the role of the board of directors in M&A transactions and other special situations. Kevin participated on a panel with Deborah Rosati, an experienced corporate director and founder of Women Get On Board, and Thierry Keable, the General Counsel for Whistler Blackcomb.
Critical Issues in Governance:The Role of the Board in Special SituationsDeborahRosati
Presented by Deborah Rosati, Kevin West and Thierry Keable at the Governance Professionals of Canada's 18th Annual Corporate Governance Conference in Whistler, B.C., August 2016.
In this presentation, FMC's Gary Sollis, discusses the top ten tips for a successful M&A. Areas addressed include: protecting the company through confidentiality agreements, the effective use of a special committee, financing the deal, responding to an unsolicited offer, structuring the deal, the pros and cons of shares vs. cash, minimizing non-completion risks, when to break free, protecting directors and officers as well as avoiding trouble with regulators.
Funding 101 for Tech Entrepreneurs & StartupsRoger Royse
Roger Royse, founder of the Royse Law Firm, discusses the various options available to entrepreneurs when it comes to funding their startup.
Topics include:
1) What are the best funding options for entrepreneurs to scale their business?
2) When should entrepreneurs pursue external funding?
3) How do entrepreneurs choose the right investor?
4) What alternative sources of funding are available?
5) How and why should a founder stage their funding rounds?
6) When should a founder think about exiting?
7) How can advisors help with the funding process?
RESTRUCTURING, INSOLVENCY & TROUBLED COMPANIES 2022: Bad Debtor Owes Me Money!Financial Poise
Sometimes it begins when a client, tenant, or customer starts to slow-pay, with the result that your accounts receivable start to accrue gradually. Other times the issue presents itself more suddenly. Either way, you find your company owed a great deal of money that looks like it may not be collected because your client/tenant/customer has filed bankruptcy, has commenced an assignment for the benefit of creditors, has been put into receivership, or is otherwise just plain insolvent. What do you do? What should you not do? The topics discussed in this webinar include the pros and cons of putting a counterparty into involuntary bankruptcy; when and how you may be able to pursue third parties (like guarantors, directors, or officers) for the amount owed; risks related to preference attack; pros and cons of sitting on a “creditors’ committee” in a Chapter 11; how to negotiate for “critical vendor” protection in Chapter 11; and practical guidance for continuing to provide goods or services to an insolvent counterparty.
Part of the webinar series: RESTRUCTURING, INSOLVENCY & TROUBLED COMPANIES 2022
See more at https://www.financialpoise.com/webinars/
Incorporation Stage Issues and Seed Financings Overview w/ Kristine Di BaccoStanford Venture Studio
Which legal entity is best for your startup company? How should you deal with founder stock and other incorporation issues? How should you structure a seed investment? Kristine Di Bacco, Partner at Fenwick & West, will help you answer these important questions, and others, as you think about the process of incorporating and raising seed financing.
In April 2014, I prepared and presented this seminar for senior bankers and investment professionals in Dubai in collaboration with A&Z Consultants, Dubai, UAE.
I am sharing this here here for everyone's benefit.
Best regards,
Bilal Hasanjee
Presentation on reflective loss in corporate law and investor-state dispute settlement by Professor Eilís Ferran of the University of Cambridge.
OECD-hosted Freedom of Investment (FOI) Roundtable:
www.oecd.org/daf/inv/investment-policy/foi.htm
Sometimes It Begins When A Client, Tenant, Or Customer Starts To Slow-Pay, With The Result That Your Accounts Receivable Start To Accrue Gradually. Other Times The Issue Presents Itself More Suddenly. Either Way, You Find Your Company Owed A Great Deal Of Money That Looks Like It May Not Be Collected Because Your Client/Tenant/Customer Has Filed Bankruptcy, Has Commenced An Assignment For The Benefit Of Creditors, Has Been Put Into Receivership, Or Is Otherwise Just Plain Insolvent. What Do You Do? What Should You Not Do? The Topics Discussed In This Webinar Include The Pros And Cons Of Putting A Counterparty Into Involuntary Bankruptcy; When And How You May Be Able To Pursue Third Parties (Like Guarantors, Directors, Or Officers) For The Amount Owed; Risks Related To Preference Attack; Pros And Cons Of Sitting On A “Creditors’ Committee” In A Chapter 11; How To Negotiate For “Critical Vendor” Protection In Chapter 11; And Practical Guidance For Continuing To Provide Goods Or Services To An Insolvent Counterparty.
Part of the webinar series: Restructuring, Insolvency & Troubled Companies 2021
See more at https://www.financialpoise.com/webinars/
Dodd-Frank Compliance and Technology Summer Meeting 2013Jeffrey C.Y. Li
Atlas Communications Technology recently co-sponsored the Dodd-Frank Compliance and Technology Summer Meeting. The presentation was an introduction to the complexities of the Dodd-Frank Wall Street Reform and Consumer Protection Act, what firms need to do to bring themselves into compliance, and the technology that can help enterprises meet the stringent demands of the act.
For more information about this conference, or to learn about our Fall meeting in September featuring one of the authors of the act, Congressman Jim Himes, please call 1-855-Dodd Frank (1-855-363-3372) for any questions, or if you wish to talk to one of our presenters today to talk about taking the next steps towards Dodd-Frank Compliance
Atlas Presentation 2013 07-09 dodd-frank summer meeting v1-0 (for online)
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
1. The Corporate Takeover Market
Common Takeover Tactics,
Takeover Defenses, and Corporate Governance
2. Treat a person as he is, and he will remain as he is.
Treat him as he could be,
and he will become what he should be.
—Jimmy Johnson
3. Exhibit 1: Course Layout: Mergers,
Acquisitions, and Other
Restructuring Activities
Part IV: Deal
Structuring and
Financing
Part II: M&A Process
Part I: M&A
Environment
Ch. 11: Payment and
Legal Considerations
Ch. 7: Discounted
Cash Flow Valuation
Ch. 9: Financial
Modeling Basics
Ch. 6: M&A
Postclosing Integration
Ch. 4: Business and
Acquisition Plans
Ch. 5: Search through
Closing Activities
Part V: Alternative
Business and
Restructuring
Strategies
Ch. 12: Accounting &
Tax Considerations
Ch. 15: Business
Alliances
Ch. 16: Divestitures,
Spin-Offs, Split-Offs,
and Equity Carve-Outs
Ch. 17: Bankruptcy
and Liquidation
Ch. 2: Regulatory
Considerations
Ch. 1: Motivations for
M&A
Part III: M&A
Valuation and
Modeling
Ch. 3: Takeover
Tactics, Defenses, and
Corporate Governance
Ch. 13: Financing the
Deal
Ch. 8: Relative
Valuation
Methodologies
Ch. 18: Cross-Border
Transactions
Ch. 14: Applying
Financial Models to
Deal Structuring
Ch. 10: Private
Company Valuation
4. Current Lecture Learning Objectives
Providing students with an understanding of
• Corporate governance and its role in protecting
stakeholders in the firm;
• Factors external and internal to the firm affecting
corporate governance;
• Common takeover tactics employed in the
market for corporate control and when and why
they are used; and
• Common takeover defenses employed by target
firms and when and why they are used.
5. Alternative Models of Corporate Control
• Market model applies when:
– Capital markets are liquid
– Equity ownership is widely
dispersed
– Board members are largely
independent
– Ownership & control are
separate
– Financial disclosure is high
– Shareholder focus more on
short-term gains
• Prevalent In U.S. and U.K.
• Control model applies when:
– Capital markets are illiquid
– Ownership is heavily
concentrated
– Board members are largely
“insiders”
– Ownership & control
overlap
– Financial disclosure limited
– Shareholder focus more on
long-term gains
• Prevalent in Europe, Asia, &
Latin America
6. Factors Affecting Corporate Governance:
Market Model Perspective
Internal to Firm
Board of Directors
Management
Internal Controls
Incentive Systems
Corporate Culture &
Values
Takeover Defenses
Bond Covenants
External to Firm
External to Firm
External to Firm
External to Firm
Legislation:
1933-34 Securities Acts
Dodd-Frank Act of 2010
Sherman Anti-Trust Act
Regulators:
SEC
Justice Department
FTC
Institutional Activism:
Pension Funds (Calpers)
Mutual Funds
Hedge Funds
Market for Corporate
Control:
Proxy Contests
Hostile Takeovers
7. Internal Factors: Board of Directors
and Management
• Board responsibilities include:
--Review management proposals/advise CEO
--Hire, fire, and set CEO compensation
--Oversee management, corporate strategy, and
financial reports to shareholders
• Good governance practices include:
--Separation of CEO and Chairman of the Board
--Boards dominated by independent members
--Independent members serving on the audit and
compensation committees
8. Internal Factors: Controls &
Incentive Systems
• Dodd-Frank Act (2010):
-- Gives shareholders of public firms nonbinding right to
vote on executive compensation packages
--Public firms must have mechanism for recovering
compensation 3-yrs prior to earnings restatement
• Alternative ways to align management and shareholder
objectives
– Link stock option exercise prices to firm’s stock price
performance relative to the overall market
– Key managers should own a significant portion of the
firm’s outstanding shares
9. Internal Factors: Corporate Culture
& Values
• Corporate culture refers to a common set of values,
traditions, and beliefs that influence management and
employee behavior within a firm.
• The desired culture for the new organization can be
promoted through
– Clear and consistent communication to all employees of
what is appropriate and what is not
– Senior management consistently displaying the desired
behaviors
– Reward systems that foster desired behaviors while
penalizing undesirable conduct
• Trust in a new organization is undermined when there is
ambiguity about the new organization’s culture/identity.
10. External Factors: Legislation
• Federal and state securities laws
– Securities Acts of 1933 and 1934
– Williams Act (1968)
• Insider trading laws
• Anti-trust laws
– Sherman Act (1890)
– Clayton Act (1914)
– Hart-Scott-Rodino Act (1976)
• Dodd-Frank Act (2010)
11. External Factors: Regulators
• Securities and Exchange Commission (SEC)
• Justice Department
• Federal Trade Commission (FTC)
• Public Company Accounting Oversight Board
(PCAOB)
• Financial Accounting Standards Board (FASB)
• Financial Stability Oversight Council (FSOC)
12. External Factors:
Institutional Activism
• Pension funds, mutual funds, and insurance
companies
• Ability to discipline management often limited by
amount of stock can legally own in a single firm
• Investors with huge portfolios (e.g., TIAA-CREF,
California Employee Pension Fund) can exert
significant influence
• Recent trend has been for institutional investors
to simply withhold their votes
13. External Factors: Market for
Corporate Control
• Changes in control can result from
hostile takeovers or proxy contests
• Management may resist takeover
bids to
– Increase the purchase price
(Shareholders’ Interests
Theory) or
– Ensure their longevity with the
firm (Management
Entrenchment Theory)
• Takeovers may
– Minimize “agency costs” and
– Transfer control to those who
can more efficiently manage
the acquired assets
14. Discussion Questions
1.Do you believe corporate governance should be
narrowly defined to encompass shareholders
only or more broadly to incorporate all
stakeholders? Explain your answer.
2.Of the external factors impacting corporate
governance, which do you believe is likely to be
the most important? Be specific.
15. Market for Corporate Control: Alternative
Takeover1 Tactics
• Friendly deals (Target board
supports bid)
• Hostile deals (Target board
contests bid). Rare due to
– Target board flexibility in
setting up defenses
– Impact on bid premiums
– Impact on postclosing
integration
• The threat of hostile bids often
moves target boards toward
negotiated settlements.
1A corporate takeover refers to a transfer of control from one investor group to another.
16. Market for Corporate Control:
“Friendly” Takeover Tactics
• Potential acquirer obtains support from the target’s board and
management early in the takeover process before proceeding to a
negotiated settlement.
– The acquirer and target firms often enter into a standstill
agreement in which the bidder agrees not to make any further
investments for a stipulated period in exchange for a break-up
fee from the target firm.
• Such takeovers are desirable as they avoid an auction environment.
• If the bidder is rebuffed, the loss of surprise gives the target firm
time to mount additional takeover defenses.
• Rapid takeovers are less likely today due to FTC and SEC pre-
notification and disclosure requirements.1
1The permitted reporting delay between first exceeding the 5% ownership stake threshold and the filing of a 13D
allowed Vornado Realty Trust to accumulate 27% of J. C. Penny’s outstanding shares before making their
holdings public.
17. Market for Corporate Control:
Hostile Takeover Tactics
• Limiting the target’s
actions through a “bear
hug”
• Proxy contests in support
of a takeover
• Purchasing target stock
in the open market
• Circumventing the
target’s board through a
tender offer
• Litigation
• Using multiple tactics
concurrently
18. Alcoa Aluminum Easily Overwhelms
Reynolds’ Takeover Defenses
Alcoa’s offer to Reynolds Metals consisted of $4.3 billion in cash plus the assumption of $1.5 billion
in Reynolds’ outstanding debt. Alcoa’s offer letter, which it made public, from its chief executive to
the Reynolds’ CEO indicated that it wanted to pursue a friendly deal but that it would pursue a
hostile bid if the two sides could not begin discussions within a week. Reynolds appeared to be
highly vulnerable because of its ongoing poor financial performance and because of its weak
takeover defenses.
Despite pressure from institutional shareholders, the Reynolds’ board rejected Alcoa’s bid as
inadequate. Alcoa’s response was to say that it would make a formal offer directly to the Reynolds’
shareholders and simultaneously solicit shareholder support for replacing the Reynolds’ board and
dismantling Reynolds’ takeover defenses. Reynolds capitulated within two weeks from receipt of
the initial solicitation and agreed to be acquired by Alcoa. The agreement contained a thirty-day
window during which Reynolds could entertain other bids. However, if Reynolds should choose to
go with another offer, it would have to pay Alcoa a $100 million break-up fee.
1. What was the dollar value of the purchase price Alcoa offered to pay for Reynolds?
2. Speculate as to why Alcoa wanted to pursue initially a friendly rather than hostile approach?
3. Describe the various takeover tactics Alcoa employed (or threatened) in its successful takeover
of Reynolds. Speculate as to why these tactics may have been employed (or threatened) by
Alcoa?
4. Why did the Reynolds’ board reject the initial offer only to accept the bid two weeks later?
5. What is the purpose of the breakup fee?
19. Market for Corporate Control:
Pre-Offer Takeover Defenses
• Poison pills to raise the cost of takeover1
• Shark repellants to strengthen the target
board’s defenses
– Staggered or classified board elections
– Limiting conditions when directors can be
removed
• Shark repellants to limit shareholder actions
– Limitations on calling special meetings
– Limiting consent solicitations
– Advance notice and super-majority
provisions
• Other shark repellants
– Anti-greenmail and fair price provisions
– Super-voting stock, re-incorporation, and
golden parachutes
1Note that poison pills could also be classified as post-offer defenses as they
may be issued by the board as dividends without shareholder approval.
20. Poison Pill: Cash for Share Purchase
P1 = Pre-offer equilibrium price/target share
P2 = Poison pill conversion price/target share
P3 = Offer price/target share
Q1 = Pre-offer target shares outstanding
Q2 = Target shares outstanding following poison pill conversion
ABCD = Incremental acquirer cash outlay due to poison pill conversion
Q1 Q2 Target Shares Outstanding
Target Price Share D S1 S2
D
P3
P1
P2
Target shareholder Profit/Share on
Poison Pill Conversion
A B
C D
DD reflects relationship between
shares outstanding and price/share for
given level of expected earnings &
interest rates.
21. Poison Pills: Share for Share Exchange
Acquirer Shareholder Ownership Dilution Due to Poison Pill
New Company Shares
Outstanding1
Ownership Distribution in
New Company (%)
Without Pill With Pill Without Pill With Pill
Target Firm Shareholders
Shares Outstanding
Total Shares Outstanding
1,000,000
1,000,000
2,000,000
2,000,000
50 673
Acquiring Firm Shareholders
Shares Outstanding
New Shares Issued
Total Shares Outstanding4
1,000,000
1,000,000
2,000,000
1,000,000
2,000,0002
3,000,000
50 33
1Acquirer agrees to exchange one share of acquirer stock for each share of target stock.
2Poison pill provisions enable each target shareholder to buy one share of target stock at a nominal
price for each share they own. Assume all target shareholders exercise their rights to do so.
32,000,000/3,000,000
4Target shares are cancelled upon completion of transaction.
23. Discussion Questions
1. Discuss the advantages and disadvantages of
the friendly versus hostile approaches to
corporate takeovers. Be specific.
2. Do you believe that corporate takeover
defenses are more motivated by the target’s
managers attempting to entrench themselves
or to negotiate a higher price for their
shareholders? Be specific.
24. Impact on Shareholder Value
• Friendly transactions realized abnormal returns to target
shareholders of about 25% during the 2000s
• Hostile transactions often result in even larger average
abnormal returns to target shareholders
• Acquirers’ shareholders earn average abnormal returns of 1%
to 1.5%; however, they may be negative for deals involving
large public firms and those using stock to pay for the deal
• Recent studies suggest
– Takeover defenses have small negative impact on
abnormal target shareholder returns
– Defenses put in place prior to an IPO may benefit target
shareholders
– Bondholders in firms with ineffective defenses (i.e.,
vulnerable to takeover) may lose value
25. Quick Quiz
All of the following are commonly used takeover
tactics, except for
a. Poison pills
b. Bear hug
c. Tender offer
d. Proxy contest
e. Litigation
26. Things to remember...
• Hostile takeover attempts and proxy contests affect
governance through the market for corporate control
• Although relatively rare, hostile takeover attempts tend to
benefit target shareholders substantially more than the
acquirer’s shareholders by putting the target into “play.”
Consequently, acquirers generally consider friendly
takeovers preferable.
• Anti-takeover measures share two things in common.
They are designed to
– Raise the overall cost of the takeover to the acquirer’s
shareholders and
– Increase the time required for the acquirer to
complete the transaction to give the target additional
time to develop an anti-takeover strategy.