As a Canadian business looking to engage in M&A transactions you need to understand how to navigate current regulatory issues. View our presentation to learn more.
With decreased commodity prices and increasing regulation, the oil and gas industry is undergoing a difficult period of self-reflection in which even the strongest companies are suffering financial distress. These pressures have resulted in a growing number of insolvencies in the oil and gas industry, including in the upstream (exploration and production companies), midstream (transporters and pipeline companies) and downstream (refining and processing) sectors, as well as by providers of services and materials. In this context, it is vital for parties to understand some of the significant issues arising in these bankruptcies, including without limitation the ability to sell (or acquire) assets “free and clear” of liens and the ability to reject burdensome contracts or leases. These issues, along with the difficulties faced by upstream companies in interfacing with regulatory agencies and evolving regulations, was the principal focus of a panel at the LSU Law Center’s 22nd Annual Bankruptcy Law Seminar entitled “Oil and Gas Industry: Dealing in Distressed Assets, Midstream Issues, and Offshore Regulatory Changes.” For more information about this timely topic, please see the attached materials or contact Benjamin Kadden at bkadden@lawla.com.
Representing Asset Purchasers in Bankruptcy (Series: Bankruptcy Transactions:...Financial Poise
Representing an asset purchaser in a bankruptcy proceeding presents unique benefits and challenges for a professional business advisor. Companies considering acquiring assets out of bankruptcy must understand more than the simple concept of acquiring the target assets “free and clear,” under the bankruptcy code. As such, professionals advising these companies must understand and be able to counsel their clients regarding various matters, such as the benefits and drawbacks of serving as a “stalking horse,” asset purchaser; drafting and negotiating the terms of an asset purchase agreement and sale order with the bankrupt debtor and other parties involved in the bankruptcy proceedings; strategies for acquiring assets at auction or by alternative means; and seeking bankruptcy court approval of a proposed transaction. This webinar focuses on understanding these concepts and addressing best practices for advanced reorganization practitioners and advisors.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/representing-asset-purchasers-in-bankruptcy-2020/
The document summarizes key aspects of the evolution and framework of SEBI's Takeover Code in India, which regulates mergers & acquisitions. It outlines objectives to protect shareholder interests while facilitating takeovers. Key definitions include acquirer, control, and persons acting in concert. It describes periodic and continual disclosure requirements. Trigger points that require open offers are acquiring over 15%, 15-55%, 55-75%, or gaining control. Exemptions are provided. The public announcement and letter of offer timeline and minimum offer price and payment terms are summarized.
The document summarizes key aspects of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 or the SEBI Takeover Code. It outlines the objectives of protecting shareholder interests and ensuring adequate disclosure in M&A transactions. It defines important terms like acquirer, control and persons acting in concert. It also describes provisions around periodic disclosures, open offer triggers, exemptions and timelines that must be followed for open offers.
This chapter discusses mergers and acquisitions. It begins with learning objectives and defines important terms. It describes the different types of takeovers including mergers, acquisitions, and amalgamations. It explains how deals can be financed through cash or share transactions. It outlines securities laws around takeovers, including disclosure requirements and thresholds for control. It differentiates between friendly acquisitions, which are willing, and hostile takeovers, which are not. It notes the process for friendly acquisitions includes due diligence and confidentiality agreements.
Representing Asset Purchasers in Bankruptcy (Series: Bankruptcy Transactions ...Financial Poise
Representing an asset purchaser in a bankruptcy proceeding presents unique benefits and challenges for a professional business advisor. Companies considering acquiring assets out of bankruptcy must understand more than the simple concept of acquiring the target assets “free and clear,” under the Bankruptcy Code. As such, professionals advising these companies must understand and be able to counsel their clients regarding various matters, such as the benefits and drawbacks of serving as a “stalking horse,” asset purchaser; drafting and negotiating the terms of an asset purchase agreement and sale order with the bankrupt debtor and other parties involved in the bankruptcy proceedings; strategies for acquiring assets at auction or by alternative means; and seeking bankruptcy court approval of a proposed transaction. For 2021, professionals must also understand the impact that the economic programs enacted under the CARES Act may have on purchasing such assets. This webinar focuses on understanding these concepts and addressing best practices for advanced reorganization practitioners and advisors.
To view the accompanying webinar, go to:https://www.financialpoise.com/financial-poise-webinars/representing-asset-purchasers-in-bankruptcy-2021/
It’s widely known that foreign companies looking to acquire strong targets are drawn to Canada’s vast resource sector. But there’s also plenty of M&A activity — and opportunity — across many other Canadian industries, such as technology, life sciences, media and communications, manufacturing and retail.
In this one-hour webinar, experts from Gowlings will share their insights on the Canadian M&A legal regime, and offer tips on how to navigate the complexities of the market and successfully acquire a Canadian company. Topics include:
- Building your acquisition model and determining the most appropriate structure for a Canadian company acquisition
- Determining the applicable tax rules and assessing the potential tax advantages
- An overview of competition law and the Investment Canada Act — due diligence, thresholds and the review process
Elderly care conference 2017 - Workshop stream A - the legal framework: share...Browne Jacobson LLP
This presentation covers what the difference between a share sale and an asset sale is. Key documents involved in a transaction, due diligence, how to address risks and limitation of liability.
With decreased commodity prices and increasing regulation, the oil and gas industry is undergoing a difficult period of self-reflection in which even the strongest companies are suffering financial distress. These pressures have resulted in a growing number of insolvencies in the oil and gas industry, including in the upstream (exploration and production companies), midstream (transporters and pipeline companies) and downstream (refining and processing) sectors, as well as by providers of services and materials. In this context, it is vital for parties to understand some of the significant issues arising in these bankruptcies, including without limitation the ability to sell (or acquire) assets “free and clear” of liens and the ability to reject burdensome contracts or leases. These issues, along with the difficulties faced by upstream companies in interfacing with regulatory agencies and evolving regulations, was the principal focus of a panel at the LSU Law Center’s 22nd Annual Bankruptcy Law Seminar entitled “Oil and Gas Industry: Dealing in Distressed Assets, Midstream Issues, and Offshore Regulatory Changes.” For more information about this timely topic, please see the attached materials or contact Benjamin Kadden at bkadden@lawla.com.
Representing Asset Purchasers in Bankruptcy (Series: Bankruptcy Transactions:...Financial Poise
Representing an asset purchaser in a bankruptcy proceeding presents unique benefits and challenges for a professional business advisor. Companies considering acquiring assets out of bankruptcy must understand more than the simple concept of acquiring the target assets “free and clear,” under the bankruptcy code. As such, professionals advising these companies must understand and be able to counsel their clients regarding various matters, such as the benefits and drawbacks of serving as a “stalking horse,” asset purchaser; drafting and negotiating the terms of an asset purchase agreement and sale order with the bankrupt debtor and other parties involved in the bankruptcy proceedings; strategies for acquiring assets at auction or by alternative means; and seeking bankruptcy court approval of a proposed transaction. This webinar focuses on understanding these concepts and addressing best practices for advanced reorganization practitioners and advisors.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/representing-asset-purchasers-in-bankruptcy-2020/
The document summarizes key aspects of the evolution and framework of SEBI's Takeover Code in India, which regulates mergers & acquisitions. It outlines objectives to protect shareholder interests while facilitating takeovers. Key definitions include acquirer, control, and persons acting in concert. It describes periodic and continual disclosure requirements. Trigger points that require open offers are acquiring over 15%, 15-55%, 55-75%, or gaining control. Exemptions are provided. The public announcement and letter of offer timeline and minimum offer price and payment terms are summarized.
The document summarizes key aspects of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 or the SEBI Takeover Code. It outlines the objectives of protecting shareholder interests and ensuring adequate disclosure in M&A transactions. It defines important terms like acquirer, control and persons acting in concert. It also describes provisions around periodic disclosures, open offer triggers, exemptions and timelines that must be followed for open offers.
This chapter discusses mergers and acquisitions. It begins with learning objectives and defines important terms. It describes the different types of takeovers including mergers, acquisitions, and amalgamations. It explains how deals can be financed through cash or share transactions. It outlines securities laws around takeovers, including disclosure requirements and thresholds for control. It differentiates between friendly acquisitions, which are willing, and hostile takeovers, which are not. It notes the process for friendly acquisitions includes due diligence and confidentiality agreements.
Representing Asset Purchasers in Bankruptcy (Series: Bankruptcy Transactions ...Financial Poise
Representing an asset purchaser in a bankruptcy proceeding presents unique benefits and challenges for a professional business advisor. Companies considering acquiring assets out of bankruptcy must understand more than the simple concept of acquiring the target assets “free and clear,” under the Bankruptcy Code. As such, professionals advising these companies must understand and be able to counsel their clients regarding various matters, such as the benefits and drawbacks of serving as a “stalking horse,” asset purchaser; drafting and negotiating the terms of an asset purchase agreement and sale order with the bankrupt debtor and other parties involved in the bankruptcy proceedings; strategies for acquiring assets at auction or by alternative means; and seeking bankruptcy court approval of a proposed transaction. For 2021, professionals must also understand the impact that the economic programs enacted under the CARES Act may have on purchasing such assets. This webinar focuses on understanding these concepts and addressing best practices for advanced reorganization practitioners and advisors.
To view the accompanying webinar, go to:https://www.financialpoise.com/financial-poise-webinars/representing-asset-purchasers-in-bankruptcy-2021/
It’s widely known that foreign companies looking to acquire strong targets are drawn to Canada’s vast resource sector. But there’s also plenty of M&A activity — and opportunity — across many other Canadian industries, such as technology, life sciences, media and communications, manufacturing and retail.
In this one-hour webinar, experts from Gowlings will share their insights on the Canadian M&A legal regime, and offer tips on how to navigate the complexities of the market and successfully acquire a Canadian company. Topics include:
- Building your acquisition model and determining the most appropriate structure for a Canadian company acquisition
- Determining the applicable tax rules and assessing the potential tax advantages
- An overview of competition law and the Investment Canada Act — due diligence, thresholds and the review process
Elderly care conference 2017 - Workshop stream A - the legal framework: share...Browne Jacobson LLP
This presentation covers what the difference between a share sale and an asset sale is. Key documents involved in a transaction, due diligence, how to address risks and limitation of liability.
This document discusses ways for sellers of commercial banks to mitigate risks to the completion of mergers and acquisitions deals during periods of financial market uncertainty. It outlines steps sellers can take before signing a sale agreement, such as recording key deal terms in a letter of intent or requiring bidders to pay deposits. Between signing and completion, sellers aim to minimize conditions and obtain regulatory approvals quickly. Specific concerns for bank sales include obtaining approvals from financial regulators and managing relationships with regulators to reduce political risks. Reverse break fees and deposits from buyers can also help guarantee completion.
The document discusses various types of divestitures including sales, spin-offs, split-offs, equity carve-outs, and split-ups. It also outlines common motivations for divestitures such as changing strategic focus, harvesting past successes, and divesting unwanted businesses. The typical divestiture process is then described which involves identifying goals, preparing valuations, developing a buyer list, negotiating offers, and finalizing the sale contract.
Sale of a Business - Legal Risk Factors and Due diligenceTom Meagher
This document summarizes the key risk factors and due diligence considerations for a buyer purchasing a business. It outlines 6 areas for buyers to focus on: 1) Ensuring the sales contract allows for comprehensive due diligence; 2) Documents and warranties to review; 3) Relevant business registers; 4) Factors that could hinder due diligence and settlement; 5) Mitigating risks before and after settlement; 6) Concessional transfer duty rates that may apply in Western Australia. The presentation is delivered by Tom Meagher, a commercial law director at Murfett Legal, to help buyers navigate legal risks when purchasing a business.
BizON had the honour of sponsoring the Business Transition Forum! We would like to share some valuable information with our audience from the forum in case you did not have the opportunity to attend!
This document outlines the key players involved in a securitization transaction and their contractual duties and disclosure requirements. It discusses the originator who initiates the securitization program to lower borrowing costs, the debtors whose payment experience is important to the success of the program, and the investors who purchase the securities issued by the special purpose vehicle (SPV). Other players covered include the arranger who designs the transaction structure, underwriters who market the securities, auditors who provide financial confirmation, the depositor who transfers assets to the SPV, lawyers who ensure legal efficacy, and the SPV itself which issues securities to fund asset acquisition. For each player, the document specifies required disclosure documents and the types of information that must be disclosed.
Advanced Mergers and Acquisitions TopicsNow Dentons
The document discusses key topics related to letters of intent (LOIs) and mergers and acquisitions agreements.
It outlines the purpose of LOIs, which is to set out the proposed parties' intentions for a commercial transaction and establish guidelines for moving forward. It describes the types of LOIs and key provisions that should be included.
The document also cautions that non-binding LOIs could still become legally enforceable under certain circumstances based on recent court cases.
Finally, it discusses common provisions found in mergers and acquisitions agreements, such as definitions of material adverse change/effect, covenants regarding the interim period between signing and closing, and restrictions on the target company's operations during this time
In this webinar presenation, you will learn practical tips on drafting and understanding commercial agreements. Extract practical insights to drafting and understanding commercial agreements and learn techniques used to allocate or transfer economic risk.
The document provides an overview of preparing for a Contractor Purchasing System Review (CPSR). It discusses the background and criteria for CPSRs, including the 24 criteria in the Defense Federal Acquisition Regulation Supplement that purchasing systems must meet. It also outlines the general policies and procedures that reviewers will examine, such as competition requirements, price analysis techniques, and contract formation guidelines. The document gives advice on how to approach a CPSR, including starting with the criteria and ensuring the review is properly scheduled.
The JOBS Act aims to create jobs and spur economic growth by streamlining regulations around IPOs and private fundraising for startups and small businesses. It includes provisions to increase shareholder thresholds for mandatory Exchange Act registration, expand the ability of private companies to generally solicit accredited investors, raise crowdfunding limits, and increase Regulation A offering limits. The document provides an overview of the various titles and their implications, noting many details still need to be addressed through SEC rulemaking. The speaker, Jeff Stein, is a partner at WilmerHale who focuses on corporate finance, mergers and acquisitions, and related matters.
A deposit is a pre-agreed instalment towards the purchase price in a sale contract.
The Courts have held that the 2 functions of a deposit are to be:
- an earnest commitment to bind the bargain, which means a deposit acts as an indication the Buyer is serious in carrying out the bargain; and
- a guarantee of due performance, that is security of the performance.
A deposit is usually paid at or upon shortly upon the buyer’s signing of the contract.
Usually, a deposit should be no more than 10% of the total purchase price, and commonly may be less. Note: there is no specific laws on that deposit percentage amount per se*.
The other practical, commercial and financial reasons for why a deposit is useful:
> Often the seller will incur not-insignificant fees and expenses (e.g. sale preparatory work and undergoing due diligence, applying to lessor for consent to assignment of lease etc), independent of whether the actual contract proceeds to settlement or completion. So may be also used to partially-compensate for some of those costs incurred If the buyer ultimately walks away”.
> Loss of potential, other sale opportunities during the express or implied exclusivity period during the conditions precedent of sale contract. This could be months or longer
> It's good to have the buyer show it has “skin in the game” by having such "hurt money" put upfront on & the table.
Tip: Even with the best of Confidentiality Deeds/NDAs , the deposit helps reinforce the value and proprietary nature of the seller’s business or entity.
> Not uncommonly, the Buyer entity may be newly-established . Therefore, if there is default or repudiation, even if they are subsequently pursued by the seller, the Buyer may not have any actual capitalisation to be realised against!
> Lastly, if a buyer or won’t (or can’t!?) put up even the deposit, then you should have serious concerns about their financial capacity to commit all the way through the transaction.
Are earn-outs a good mechanism to reach agreement in the M&A context or are today’s disagreements over price tomorrow’s litigation over outcome? This presentation addresses what you need to know now about the latest developments in earn-outs.
This presentation features a discussion of the following hot button issues:
Market trends in earn-out use
Nuts and bolts of negotiating earn-outs
Seller versus buyer perspectives
Litigation concerns
Eye of the Tiger: Preparing to Sell Your BusinessNow Dentons
This presentation outlines the role of legal counsel in the acquisition process, pre-sale due diligence, important strategic issues in selling your business, as well as tax considerations related to the sale of a business.
The document discusses various factors to consider when using the guideline merged and acquired company method to value a subject company. It notes that transaction prices may represent fair market value, investment value, or a blend depending on the type of buyer and synergies. The value of a company can vary between potential buyers. Key factors to evaluate for each guideline transaction include deal structure, assets/liabilities included, and whether prices need adjusting. Weighting and selecting appropriate valuation multiples requires analyzing comparability and reliability of the guideline data. Non-operating assets and excess/deficient assets also require adjustment.
This document provides an overview and summary of key considerations for mergers and acquisitions (M&A) transactions involving venture capital (VC) investors. It discusses issues such as board consideration of acquisition proposals, director indemnification, M&A planning, transaction structures, selling shareholder implications, litigation expense funds, earn-outs, and appointing a shareholder representative. The summary highlights fiduciary duties of boards, types of M&A transaction structures including taxable and tax-free deals, and complexities that may arise in venture-backed exits.
This document provides guidance on conducting due diligence for an M&A transaction. It discusses scoping a due diligence engagement, including factors to consider for asset versus share transactions. The three pillars of due diligence are identified as strategic rationale, risk reduction, and post-diligence technicalities. Key areas of due diligence include financial, commercial, operational, legal, HR, and environmental. Pricing an engagement with external advisors and common mistakes are also covered.
Spotlight on Licensing - Avoiding and Limiting Risk in AgreementsMichael Annis
This document provides an overview of key considerations for negotiating licensing agreements to avoid and limit risks. It discusses preparing for negotiations by understanding the value of the licensed asset. Key licensing terms that should be addressed include scope, improvements, enforcement rights, representations, valuations, exclusivity, and bankruptcy. When negotiating, common pitfalls to avoid are having a winner-take-all attitude, focusing on price over other terms, and not understanding the other party's critical issues. Thorough preparation and balancing both parties' interests leads to stronger agreements.
Addressing Retail Flowback in Unlisted REITs (real estate investment trusts)Spencer Johnson
The document discusses potential strategies for addressing the "flowback issue" faced by unlisted real estate investment trusts (REITs) pursuing a listing transaction. Specifically, it examines doing nothing, implementing lock-ups to control shareholder selling, and having the REIT enter the market to absorb some of the shareholder selling. Case studies of previous REITs that did nothing showed significant downward pressure on stock prices from retail shareholder selling. Implementing lock-ups through a recapitalization is an effective but costly strategy requiring shareholder approval. Having the REIT purchase some shares could help but is restricted by regulations around the listing process.
KYC - Know Your Costumer and the Importance of SuitabilityMichaelSabaJD
This slide deck was prepared as a fictional compliance project. It contains helpful information from FINRA for broker/dealers on the importance of knowing your customer, anti-money laundering, and how the suitability rule should be applied.
This document provides an overview and agenda for a chapter on mergers and acquisitions. It begins with learning objectives that cover the different types of acquisitions, how friendly and hostile acquisitions proceed, and where acquisition gains may be found. It then defines important terms and covers types of takeovers such as mergers, acquisitions, and amalgamations. It also discusses securities legislation pertaining to takeovers, the processes for friendly and hostile acquisitions, defensive tactics, and motivations for mergers and acquisitions focusing on creating synergy.
On May 9, 2016, certain amendments to the take-over bid rules in Canada are expected to come into force which are intended to rebalance the current dynamic among bidders, target boards and target shareholders in the context of hostile take-over bids.
This chapter discusses mergers and acquisitions. It defines key terms like takeover, acquisition, and merger. It explains the different types of takeovers including cash and share transactions. It outlines securities laws around takeovers, including critical shareholder percentage thresholds. The chapter compares friendly and hostile acquisitions and the typical processes for each. It also discusses motivations for mergers and acquisitions like creating synergies through economies of scale or scope.
This document discusses ways for sellers of commercial banks to mitigate risks to the completion of mergers and acquisitions deals during periods of financial market uncertainty. It outlines steps sellers can take before signing a sale agreement, such as recording key deal terms in a letter of intent or requiring bidders to pay deposits. Between signing and completion, sellers aim to minimize conditions and obtain regulatory approvals quickly. Specific concerns for bank sales include obtaining approvals from financial regulators and managing relationships with regulators to reduce political risks. Reverse break fees and deposits from buyers can also help guarantee completion.
The document discusses various types of divestitures including sales, spin-offs, split-offs, equity carve-outs, and split-ups. It also outlines common motivations for divestitures such as changing strategic focus, harvesting past successes, and divesting unwanted businesses. The typical divestiture process is then described which involves identifying goals, preparing valuations, developing a buyer list, negotiating offers, and finalizing the sale contract.
Sale of a Business - Legal Risk Factors and Due diligenceTom Meagher
This document summarizes the key risk factors and due diligence considerations for a buyer purchasing a business. It outlines 6 areas for buyers to focus on: 1) Ensuring the sales contract allows for comprehensive due diligence; 2) Documents and warranties to review; 3) Relevant business registers; 4) Factors that could hinder due diligence and settlement; 5) Mitigating risks before and after settlement; 6) Concessional transfer duty rates that may apply in Western Australia. The presentation is delivered by Tom Meagher, a commercial law director at Murfett Legal, to help buyers navigate legal risks when purchasing a business.
BizON had the honour of sponsoring the Business Transition Forum! We would like to share some valuable information with our audience from the forum in case you did not have the opportunity to attend!
This document outlines the key players involved in a securitization transaction and their contractual duties and disclosure requirements. It discusses the originator who initiates the securitization program to lower borrowing costs, the debtors whose payment experience is important to the success of the program, and the investors who purchase the securities issued by the special purpose vehicle (SPV). Other players covered include the arranger who designs the transaction structure, underwriters who market the securities, auditors who provide financial confirmation, the depositor who transfers assets to the SPV, lawyers who ensure legal efficacy, and the SPV itself which issues securities to fund asset acquisition. For each player, the document specifies required disclosure documents and the types of information that must be disclosed.
Advanced Mergers and Acquisitions TopicsNow Dentons
The document discusses key topics related to letters of intent (LOIs) and mergers and acquisitions agreements.
It outlines the purpose of LOIs, which is to set out the proposed parties' intentions for a commercial transaction and establish guidelines for moving forward. It describes the types of LOIs and key provisions that should be included.
The document also cautions that non-binding LOIs could still become legally enforceable under certain circumstances based on recent court cases.
Finally, it discusses common provisions found in mergers and acquisitions agreements, such as definitions of material adverse change/effect, covenants regarding the interim period between signing and closing, and restrictions on the target company's operations during this time
In this webinar presenation, you will learn practical tips on drafting and understanding commercial agreements. Extract practical insights to drafting and understanding commercial agreements and learn techniques used to allocate or transfer economic risk.
The document provides an overview of preparing for a Contractor Purchasing System Review (CPSR). It discusses the background and criteria for CPSRs, including the 24 criteria in the Defense Federal Acquisition Regulation Supplement that purchasing systems must meet. It also outlines the general policies and procedures that reviewers will examine, such as competition requirements, price analysis techniques, and contract formation guidelines. The document gives advice on how to approach a CPSR, including starting with the criteria and ensuring the review is properly scheduled.
The JOBS Act aims to create jobs and spur economic growth by streamlining regulations around IPOs and private fundraising for startups and small businesses. It includes provisions to increase shareholder thresholds for mandatory Exchange Act registration, expand the ability of private companies to generally solicit accredited investors, raise crowdfunding limits, and increase Regulation A offering limits. The document provides an overview of the various titles and their implications, noting many details still need to be addressed through SEC rulemaking. The speaker, Jeff Stein, is a partner at WilmerHale who focuses on corporate finance, mergers and acquisitions, and related matters.
A deposit is a pre-agreed instalment towards the purchase price in a sale contract.
The Courts have held that the 2 functions of a deposit are to be:
- an earnest commitment to bind the bargain, which means a deposit acts as an indication the Buyer is serious in carrying out the bargain; and
- a guarantee of due performance, that is security of the performance.
A deposit is usually paid at or upon shortly upon the buyer’s signing of the contract.
Usually, a deposit should be no more than 10% of the total purchase price, and commonly may be less. Note: there is no specific laws on that deposit percentage amount per se*.
The other practical, commercial and financial reasons for why a deposit is useful:
> Often the seller will incur not-insignificant fees and expenses (e.g. sale preparatory work and undergoing due diligence, applying to lessor for consent to assignment of lease etc), independent of whether the actual contract proceeds to settlement or completion. So may be also used to partially-compensate for some of those costs incurred If the buyer ultimately walks away”.
> Loss of potential, other sale opportunities during the express or implied exclusivity period during the conditions precedent of sale contract. This could be months or longer
> It's good to have the buyer show it has “skin in the game” by having such "hurt money" put upfront on & the table.
Tip: Even with the best of Confidentiality Deeds/NDAs , the deposit helps reinforce the value and proprietary nature of the seller’s business or entity.
> Not uncommonly, the Buyer entity may be newly-established . Therefore, if there is default or repudiation, even if they are subsequently pursued by the seller, the Buyer may not have any actual capitalisation to be realised against!
> Lastly, if a buyer or won’t (or can’t!?) put up even the deposit, then you should have serious concerns about their financial capacity to commit all the way through the transaction.
Are earn-outs a good mechanism to reach agreement in the M&A context or are today’s disagreements over price tomorrow’s litigation over outcome? This presentation addresses what you need to know now about the latest developments in earn-outs.
This presentation features a discussion of the following hot button issues:
Market trends in earn-out use
Nuts and bolts of negotiating earn-outs
Seller versus buyer perspectives
Litigation concerns
Eye of the Tiger: Preparing to Sell Your BusinessNow Dentons
This presentation outlines the role of legal counsel in the acquisition process, pre-sale due diligence, important strategic issues in selling your business, as well as tax considerations related to the sale of a business.
The document discusses various factors to consider when using the guideline merged and acquired company method to value a subject company. It notes that transaction prices may represent fair market value, investment value, or a blend depending on the type of buyer and synergies. The value of a company can vary between potential buyers. Key factors to evaluate for each guideline transaction include deal structure, assets/liabilities included, and whether prices need adjusting. Weighting and selecting appropriate valuation multiples requires analyzing comparability and reliability of the guideline data. Non-operating assets and excess/deficient assets also require adjustment.
This document provides an overview and summary of key considerations for mergers and acquisitions (M&A) transactions involving venture capital (VC) investors. It discusses issues such as board consideration of acquisition proposals, director indemnification, M&A planning, transaction structures, selling shareholder implications, litigation expense funds, earn-outs, and appointing a shareholder representative. The summary highlights fiduciary duties of boards, types of M&A transaction structures including taxable and tax-free deals, and complexities that may arise in venture-backed exits.
This document provides guidance on conducting due diligence for an M&A transaction. It discusses scoping a due diligence engagement, including factors to consider for asset versus share transactions. The three pillars of due diligence are identified as strategic rationale, risk reduction, and post-diligence technicalities. Key areas of due diligence include financial, commercial, operational, legal, HR, and environmental. Pricing an engagement with external advisors and common mistakes are also covered.
Spotlight on Licensing - Avoiding and Limiting Risk in AgreementsMichael Annis
This document provides an overview of key considerations for negotiating licensing agreements to avoid and limit risks. It discusses preparing for negotiations by understanding the value of the licensed asset. Key licensing terms that should be addressed include scope, improvements, enforcement rights, representations, valuations, exclusivity, and bankruptcy. When negotiating, common pitfalls to avoid are having a winner-take-all attitude, focusing on price over other terms, and not understanding the other party's critical issues. Thorough preparation and balancing both parties' interests leads to stronger agreements.
Addressing Retail Flowback in Unlisted REITs (real estate investment trusts)Spencer Johnson
The document discusses potential strategies for addressing the "flowback issue" faced by unlisted real estate investment trusts (REITs) pursuing a listing transaction. Specifically, it examines doing nothing, implementing lock-ups to control shareholder selling, and having the REIT enter the market to absorb some of the shareholder selling. Case studies of previous REITs that did nothing showed significant downward pressure on stock prices from retail shareholder selling. Implementing lock-ups through a recapitalization is an effective but costly strategy requiring shareholder approval. Having the REIT purchase some shares could help but is restricted by regulations around the listing process.
KYC - Know Your Costumer and the Importance of SuitabilityMichaelSabaJD
This slide deck was prepared as a fictional compliance project. It contains helpful information from FINRA for broker/dealers on the importance of knowing your customer, anti-money laundering, and how the suitability rule should be applied.
This document provides an overview and agenda for a chapter on mergers and acquisitions. It begins with learning objectives that cover the different types of acquisitions, how friendly and hostile acquisitions proceed, and where acquisition gains may be found. It then defines important terms and covers types of takeovers such as mergers, acquisitions, and amalgamations. It also discusses securities legislation pertaining to takeovers, the processes for friendly and hostile acquisitions, defensive tactics, and motivations for mergers and acquisitions focusing on creating synergy.
On May 9, 2016, certain amendments to the take-over bid rules in Canada are expected to come into force which are intended to rebalance the current dynamic among bidders, target boards and target shareholders in the context of hostile take-over bids.
This chapter discusses mergers and acquisitions. It defines key terms like takeover, acquisition, and merger. It explains the different types of takeovers including cash and share transactions. It outlines securities laws around takeovers, including critical shareholder percentage thresholds. The chapter compares friendly and hostile acquisitions and the typical processes for each. It also discusses motivations for mergers and acquisitions like creating synergies through economies of scale or scope.
Securities and Exchange Board of India TAKEOVER CODE Feb 2016.pptAnuragDash17
The document provides an overview of the SEBI Takeover Code and recent changes. Some key points:
- The code aims to regulate acquisitions of listed companies' shares or control. It was recently revised based on recommendations.
- It applies to substantial acquisitions of shares, voting rights, or control of a listed company by an acquirer individually or with persons acting in concert.
- Important definitions include acquirer, control, and persons acting in concert. Control means right to appoint majority directors or control policy decisions.
- Threshold for open offer increased from 15% to 25%. Open offer size also increased from 20% to 26% of shares.
Dodd Frank Act 2015 Rule Implementation: Will The World End?Jillayne Schlicke
The Dodd Frank Act Rule Implementation of 2015 will bring another set of changes to the lending and escrow industries. Spoiler alert: The world will not end.
Presentation titled, 'More Than Just Buying Stuff: New Procurement Regime,' delivered by Peter Gough JP, Cayman Islands Government at the Conference, 'Project Cycle Management Conference - A Cornerstone of Implementation and Delivery,' September 2019 in St. George's Grenada.
1. The document discusses various types of mergers and acquisitions (M&A) transactions including horizontal and vertical integration, diversification, advantages of M&A, and issues from different perspectives of acquirers and target companies.
2. Key regulatory considerations for M&A transactions in India are discussed including the Companies Act, Income Tax Act, Foreign Exchange Management Act, Competition Act, and SEBI regulations.
3. Structures and processes for acquisitions, mergers, demergers, and other spin-offs are outlined along with transaction issues and taxation implications.
Merger and acquisition shareholder value maximization and its legalArthur Mboue
The document discusses various aspects of mergers and acquisitions including:
1) Why an M&A advisor must master corporate finance to properly advise clients, deal with legal cases involving valuation, and comply with the duty of care.
2) The different types of acquisition agreements and how they impact ownership status.
3) The key steps in a bidding war for a target company including establishing a motive, choosing a target through due diligence, valuing the target, deciding on a payment method, and determining bidding parameters.
This document summarizes a workshop on mergers and acquisitions presented by Babasab Patil. It discusses reasons for M&A including market intensification through horizontal integration, market extensions, and vertical integration. It also discusses diversification as a reason for M&A. The document outlines different perspectives in M&A deals including the acquirer and target company. It discusses key transaction issues for targets and acquirers. Finally, it provides an overview of the regulatory framework and transaction structures for mergers, acquisitions, spin-offs, and demergers.
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How the new take over bid rules will change Canadian M&A for Buyers and Targets
1. Osler, Hoskin & Harcourt LLP
How the New Take-over Bid Rules will
Change Canadian M&A for Buyers and
Targets
May 25, 2016
2. 2
HOW THE NEW TAKE-OVER BID RULES WILL CHANGE CANADIAN M&A FOR BUYERS AND TARGETS
Introduction
• Mergers and acquisitions (M&A) transactions have inherent
complexities that need to be clearly understood and properly
addressed
• Canadian businesses looking to engage in M&A transactions must
navigate through various regulatory issues as it stands
• Recent amendments to the take-over bid rules are changing the
Canadian M&A landscape
• Both buyers and targets need to stay abreast of ongoing rules and
regulations in order to stay compliant
3. 3
HOW THE NEW TAKE-OVER BID RULES WILL CHANGE CANADIAN M&A FOR BUYERS AND TARGETS
Overview
In addition to helping you stay abreast of regulatory compliance issues, this presentation
arms both buyers and targets with the strategic framework to drive informed decisions
based on the following:
• An overview of amendments to Canadian take-over bid rules
• How buyers may approach targets differently
• How you can structure/time transactions to take advantage of the new rules
• What to do with Rights Plans
• What other tactics should be considered
• How the new regime may change the Canadian M&A landscape
How the new take-over bid rules will change Canadian M&A for buyers and targets, from
Osler, Hoskin & Harcourt LLP.
For more information, please contact Simone Knott at sknott@osler.com or 403-592-7280
4. 4
HOW THE NEW TAKE-OVER BID RULES WILL CHANGE CANADIAN M&A FOR BUYERS AND TARGETS
New Take-Over Bid Regime: 50-10-105
Legislative Instruments
• National Instrument 62-104 – Take-Over Bids and Issuer Bids
◦ Full harmonization and replaces OSC Rule 62-504 – Take-Over Bids and Issuer Bids
• National Policy 62-203 – Take-Over Bids and Issuer Bids (Bid Regime)
• National Policy 62-202 – Take-Over Bids – Defensive Tactics (unchanged)
Minimum Tender Requirement
• Mandatory more than 50% minimum tender requirement by shareholders other than the
bidder and its joint actors (non-waivable)
• Prevents acquisition of control of the offeree without the majority supporting the bid
• Collective action of the majority comparable to a vote on the bid
5. 5
HOW THE NEW TAKE-OVER BID RULES WILL CHANGE CANADIAN M&A FOR BUYERS AND TARGETS
New Take-Over Bid Regime: 50-10-105
Extension Periods
• Mandatory 10-day extension after minimum tender requirement satisfied and satisfaction or
waiver of all other terms and conditions
• “Pressure to tender” eliminated
• Once a shareholder knows how the majority has decided then have a second chance to not
be “left behind”
• Optional further extension after expiry of mandatory 10-day extension is permitted for full
take-over bids
6. 6
HOW THE NEW TAKE-OVER BID RULES WILL CHANGE CANADIAN M&A FOR BUYERS AND TARGETS
New Take-Over Bid Regime: 50-10-105
Minimum Deposit Period
• 105-day minimum deposit period,
• Effectively results in a mandatory 105-day “permitted bid” regime for hostile bids
• To provide offeree boards with opportunity to seek value maximizing alternatives or to
develop and articulate their views of the merits of the bid
• Two exceptions to the 105-day deposit period:
◦ If target issues a “deposit period news release” in respect of a proposed or commenced
bid providing for a bid period shorter than 105 days but not less than 35 days, then all
other outstanding or subsequent bids would also be entitled to the shorter period
counted from the date that other bid is made
◦ If target issues a news release that it has entered into an “alternative transaction” –
effectively a friendly change of control transaction – then all other outstanding or
subsequent bids would be entitled to a minimum 35-day deposit period counted from
the date that other bid is made – no longer a need for a 105 day minimum deposit
period as offeree has determined that an alternative transaction is appropriate
7. 7
HOW THE NEW TAKE-OVER BID RULES WILL CHANGE CANADIAN M&A FOR BUYERS AND TARGETS
Implications of New Take-over Bid Regime for Buyers and Targets
Positive Implications:
1) Greater time for offeree issuer to respond to, and consider alternatives to, a bid
Gives board more time to assess bid information, attract competing offers or seek value-
maximizing strategic alternatives
2) Elimination of any-or-all bids
◦ Minimum tender requirement means that shareholders as a collective body decide on
adequacy of bid (i.e. the majority of the non-offeror group required to accept)
3) Mitigation of coercive aspects of prior tender process
◦ Ability of offeree shareholders to tender whether or not they support the bid in the first
instance (given the mandatory 10-day extension period)
4) Preserves ability to complete friendly deals in 35 days
8. 8
HOW THE NEW TAKE-OVER BID RULES WILL CHANGE CANADIAN M&A FOR BUYERS AND TARGETS
Implications of New Take-over Bid Regime for Buyers and Targets
(cont.)
Negative Implications:
1) Potential higher costs and risks to hostile bidders
◦ Higher financing costs and greater risk of an interloper
2) More difficult to complete partial bids due to 50% minimum tender requirement
9. 9
HOW THE NEW TAKE-OVER BID RULES WILL CHANGE CANADIAN M&A FOR BUYERS AND TARGETS
Contested Transactions – Timing Implications
Where Hostile Bid Is First:
• 105-day initial hostile bid can be abridged by offeree board if white knight transaction
emerges
• If white knight transaction is a bid, hostile bidder is entitled to same bid period
◦ For example, if 40 day white knight bid, hostile bidder may abridge from 105 to 40 days (provided at
least 10 days’ notice of the new expiry date)
• If white knight transaction is an “alternative transaction”, such as an arrangement, hostile
bidder may abridge from 105 to 35 days (provided at least 10 days’ notice of new expiry date)
• Hostile bidder in theory maintains timing advantage over white knight in both cases
• Potential for “gaming” if white knight transaction structured as 105-day bid and white knight
abridges when ready to take up
◦ White knight receives regulatory approvals and can close on day 90
◦ Could equalize timing or gain slight advantage by providing 10 days’ notice of abridgement on day 80
◦ Hostile bidder may not be able to send notice of variation same day so would be at least one day
behind
10. 10
HOW THE NEW TAKE-OVER BID RULES WILL CHANGE CANADIAN M&A FOR BUYERS AND TARGETS
Contested Transactions – Timing Implications
Where Friendly Transaction Is First:
• Timing implications for hostile bidder vary depending on structure of friendly transaction
◦ If structured as a bid, hostile bid must be kept open for at least as long as friendly bid
◦ If structured as an “alternative transaction,” hostile bid must be open for minimum of 35 days
• May create incentive to structure friendly transactions as bids rather than arrangements
◦ Assume friendly transaction requires regulatory approval (Investment Canada Act or Competition
Act) expected to take up to 105 days
◦ If structured as an arrangement, hostile bidder without the same (or with shorter) regulatory
requirement could make a 35-day bid (say on day 20), and potentially obtain a timing advantage over
the friendly bidder (by being in a position to close on day 55)
◦ If structured as a 105-day bid, hostile bidder also subject to 105-day bid period from the date the
hostile bid was launched (say on day 20), which preserves timing advantage of friendly bidder (105
days as opposed to 125 days)
• Practically there is low risk that a topping bid would be unsupported
11. 11
HOW THE NEW TAKE-OVER BID RULES WILL CHANGE CANADIAN M&A FOR BUYERS AND TARGETS
Implications for Existing Rights Plans
• CSA did not explicitly address how rights plans will be treated under the new regime (or
defensive tactics more generally)
• We expect that, absent unusual circumstances, a rights plan will be cease traded following a
“50-10-105” bid
◦ Securities regulators will be called upon less frequently to hold hearings as to when “the
pill must go”
◦ Will result in greater certainty as to timing of bids than under the prior regime
• Given 105-day minimum bid period, there is less incentive for issuers to adopt rights plans
either “strategically” at their annual meetings or “tactically” in the face of a bid
12. 12
HOW THE NEW TAKE-OVER BID RULES WILL CHANGE CANADIAN M&A FOR BUYERS AND TARGETS
Implications for Existing Rights Plans (cont.)
• Continued role for rights plans in protecting against exempt “creeping” bids (e.g., bids made
through the normal course purchase and private agreement exemptions)
• Given absence of guidance from proxy advisory firms such as ISS, we recommend that issuers
not rush to implement changes to their rights plans
◦ Expect ISS will endorse rights plans that define a “Permitted Bid” as a bid made in
compliance with new rules
13. 13
HOW THE NEW TAKE-OVER BID RULES WILL CHANGE CANADIAN M&A FOR BUYERS AND TARGETS
Considerations for Buyers
• More Risk in Unsolicited Bids
◦ Less options to withdraw bid after launch
◦ Higher financing costs/risks whether cash or share consideration
◦ Higher chance of interloper
◦ One chance to get to compulsory squeeze
• More Attempts to Get Target Board to Negotiate
◦ Bear hug letters (private and public)
◦ Activism for board seats
◦ Creative conditions
◦ Pressure to waive down deposit period
• More Analysis of Target Shareholder Base
◦ Difficult hurdle if high retail base
◦ More risk of blocking positions
◦ Impact on toehold and private agreement strategies
14. 14
HOW THE NEW TAKE-OVER BID RULES WILL CHANGE CANADIAN M&A FOR BUYERS AND TARGETS
Considerations for Target
• Know Your Shareholder Base
◦ More information about shareholders in Early Warning Reports
◦ Shareholder engagement is a two way street
• Director Circular Still Required After 15 Days
◦ Likely more first circulars with “no recommendations” and “Stop, wait and listen”
◦ More substance in circulars later in the bid period
• More Emphasis on Alternatives
◦ Longer auction periods
◦ Private placements
◦ Asset sales
• Impact on Operations
◦ Costs over a longer period
◦ Board involvement
◦ More reporting during bid period
◦ Longer period of uncertainty for stakeholders (customers, suppliers, bankers, employees)
15. 15
HOW THE NEW TAKE-OVER BID RULES WILL CHANGE CANADIAN M&A FOR BUYERS AND TARGETS
Considerations for Both Buyers/Targets
• It’s now a Marathon; not a Sprint
◦ Impact on messaging, IR/media plan
• Battlefield Revert to Courts?
◦ Regulators may be disappointed
• Impact on Arbitrage Engagement?
◦ When do they take positions
• Knowledge is Power, Timing is Control
◦ Pendulum swung back to targets in hostile transactions
◦ Structural considerations more nuanced in friendly transactions