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fina4210 test 2
fina 4210 test 2
43
Finance
Undergraduate 4
04/20/2011

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Term
deregulation in europe
Definition
privatization
Term
besides privatization, another political shock that has impacted merger activity in Europe
Definition
free trade throughout the EU
Term
golden share; and in regards to telecom italia
Definition
when the gov has the ability to block a merger; w/ telecom italia golden shares were enacted vs deutsche telecom
Term
white knight in telecom italia deal; why did mgmt prefer that bidder over the initial
Definition
deutch telecom; preferred them bc mgmt felt more secure in keeping job and there would have been more synergies
Term
two shocks that have motivated int'l merger activity in brewing industry
Definition
pol: free trade throughout EU, no barriers bw countries; tech: distribution systems, brand names, int'l marketing, mass media
Term
was InBev/Anheuser an auction or negotiation? explain...
Definition
Auction; after unsolicited bid from In-Bev, Anheuser sought a third party
Term
when did InBev/Anheuser switch from hostile to friendly?
Definition
after Anheuser sought a third party; InBev agreed to ensure they would get the winning bid
Term
why did heineken want to acquire FEMSA
Definition
geographic merger; regional brand marketing: horizontal; to become bigger competitor in brewing industry
Term
why did sanofi want chattem
Definition
chattem is big in US for generic drugs, and sanofi wanted to expand out of prescription drugs and get in the US market
Term
legal structure of sanofi/chattem
Definition
tender; chattem CEO asked shareholders to tender their shares; 14d9; approval by board
Term
when sanofi signed a standsstill agreement, what did it prevent sanofi from doing
Definition
trying to take employees for 18 mos. and can't announce intention of the acquisition
Term
how did chattem ensure co's shareholders received a reasonable price
Definition
declined initial offer from Sanofi and had extended negotiation (to increase bid price); hired morgan stanley for fairness analysis
Term
4 main segments of natural gas industry
Definition
exploration; production; pipeline transmission; distribution
Term
what decade was PUHCA enacted and what fed regulator administered it
Definition
1935; SEC
Term
when was PUHCA repealed? which president signed the act
Definition
2005; george bush
Term
price of barrel of oil; larges integrated oil co in US; most imp supply factor affecting pr's
Definition
108; XOM; unrest in middle east
Term
in scripps/comcast why was spinoff of cable assets advantageous to each party?
Definition
scripps sold cable assets to focus more on tv programming and comcast acquired more cable assets to make them ntl competitor in cable industry (largest)
Term
industrial org of comcast/ge where comcast will have control in NBC
Definition
vertical; comcast is a cable service providor acquiring a cable network; expansion of product line
Term
was comcast/nbc deal auction or negotiation? what contractual provision affected takeover process
Definition
negotiation; comcast had NBC sign exclusivity agreement to not allow other bidders in transaction
Term
2 fed agencies to approve comcast/nbc deal
Definition
FCC and DOJ
Term
who acquire RJR nabisco; auction or negotiation?
Definition
KKR; auction- 3 bidders: KKR, Ross Johnson and other mgmt, and First boston
Term
procedure when KKR took RJR public again?
Definition
reverse LBO; IPO
Term
two main business segments of RJR
Definition
food; cigarettes
Term
what firm acquired one of two main RJR sements? and what firm now owns that segment?
Definition
Philip Morris acquired Nabisco, which is now owned by kraft
Term
what makes corporate governance imp? who is main voice for shareholders
Definition
separation of ownershihp and control- having best interest for shareholders in mind; board of directors
Term
recent legislation that has impacted corporate governance?
Definition
Sarbanes Oxley Act of 2002; more board independence
Term
conflict of interest in Kinder morgan and RJR deals?
Definition
they were both possibilities of mbo's, which is tricky to make sure shareholders interests are best being looked out for; hired special committees
Term
decision faced by Ameritrade?
Definition
sell to etrade or buy TD; since ameritrade is family run by Scripps, they wanted to make sure shareholder interest was looked out for; hired special committee
Term
when NYSE founded
Definition
1792
Term
distinct feature of Archipelago
Definition
ECN electronic communications network
Term
notable aspect of NYSE/Euronext merger?
Definition
created the first transatlantic exchange
Term
2 shocks associated w/ mergers of stock exchanges
Definition
tech: online trading and brokerage made possible, constant update of info and accessibility of markets; pol: free trade in EU, which allowed NYSE Euronext merger
Term
two reasons why petrochemical industry increased vertical integration
Definition
OPEC Embargo (volatility of energy prices); decreased transaction costs
Term
compare UK electric utilities industry w/ US telecom industry
Definition
the US baby bell break up in 1984 led to 7 regional companies; in UK electrical utilities break up in 14995 led to 12 regional companies; both deregulations led to mass merger activity bw local companies across UK and US
Term
dates: NASDAQ; NYSE; Archipelago; Euronext; NYSE/Archipelago; NYSE/Euronext
Definition
1971;1972;1996;2000;2005;2007
Term
vertical oil structure
Definition
exploration; pipeline transmission; gathering/processing (gas/electric co's); local distribution (residence/businesses)
Term
AT&T acquires T-Mobile
Definition
Verizon purchases alltel to become largest wireless provider; at&t/t-mobile are currently conducting deal to become new largest wireless provider; $39 billion offer; if they merge they will own about 37% of marker share
Term
fairness opinion
Definition
provide a 3rd party assessment of the soundness of a transaction for the target firm; saying the price in the transaction is fair for shareholders from a financial point of view
Term
Smith vs Van Gorkum
Definition
the target firm got the premium, but the courts didn't like the process; said you should have an investment bank for a fairness opinion; makes the process more objective; court order necessity of a fairness opinion
Term
regulation in natural gas industry
Definition
PUHCA: Public Utilities Holding Company Act of 1935- regulation of gas and energy industries, broke up vertical structure and required divestitures; FERC: Federal Energy Regulatory Commission
Term
deregulation in natural gas industry
Definition
in 1990's; Energy Policy Act of 1992: removed PUHCA barriers; FERC orders (636, 888, 889) unbundling of natural gas services
Term
Payment to investment banks, contingent or fixed?
Definition
bank receives monthly retainer and other fees; also receives a contingency fee when the deal is closed; possible termination fee
Term
why were anti-trust issues raised against InBev/Anheuser merger?
Definition
InBev owned LaBatte which was a major seller in New England; the other major seller was Anheuser Busch; if InBev acquired Anheuser and still owned LaBatte, it would have a major monopoly in the area, so in order for the merger to go through InBev had to divest LaBatte and some other co's
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