M&A_Type of Merger
2016-11-12 15:39:43 0 举报AI智能生成
M&A1-2
作者其他创作
大纲/内容
Historically,
Conglomerate Merger in 1960s
"Conglomerate"
price/earning ratio
Indication: expectation of the market of its earning capability in the future
Effect:
poor performacne of the management - decentralized - inefficient earning
threat of takeover
Conglomerates in Euro or Asia as exception
Why: Controlling Minority Structure (CMS)
Dual class equity structures (most common in US)
NYSE, Amex and NASDAQ adopt a uniform voluntary rule that basically re-adopts 19c-4, prohibiting dual class recaps but allwing low-vote new issues, so that the "lack of vote" can be built into the price
Dual class structure can only be adopted by midstream charter amendment
Correspondingly, triggering the class voting device
Pyramiding (most polular worldwide)
Cross ownership
Linked by horizontal cross-holdings of shares that reinforce and entrench the power of central controllers
Voting rights used to control are distributed over the entire group rather than concentrated in the hands of a single company or shareholder
prosperity of LBO at the end of 1970s
junk bond （“JB”）
who is the issuer?
small company unable to get investment from public market
What is the economic motivation?
"junk" nature:
when due, possibly unable to get paid
when holding, unable to transfer
why attrictive (although risky - not rated "investment grade (essencially gambling)"), esp. for loan associations and casualty insuance industry?
importance of JB for M&A: source for LBO
LBO: purchase with borrowed funds
how they earn: change the tide of conglomerate -breaking apart, selling unprofitable departments, and improving management
how they lose (vulnerability): cost of captical
esp. MBO (managment buy-out)
Advantage (cf. the form without particiation of "M"): Alliance between shareholders and managers
After the declination of junk bund, MBO rely on private fund
Horizontal v. Vertical:
Horizontal - market power concern (see. the article by Henry Manne)
0 条评论
下一页
