Shared Flashcard Set

Details

m&a cont'd
m&a 12-14
19
Business
Graduate
05/02/2009

Additional Business Flashcards

 


 

Cards

Term
Financial Acquirers
Definition
-Treat deal management as a core part of business -Well established processes -flexible - adjust as they move forward -Carefully coordinate with various actors
Term
Friendly Acquisition Process - Five Distinct Stages
Definition
1. Screening potential deals 2. Reaching an initial agreement- from talkin to planning 3. Conducting due diligence - gearing up for negotiations 4. Setting the final agreement - getting to final terms 5. Closing - making it happen
Term
1. Screening Deals Two Simple Rules in Screening Deals
Definition
-Look at everything - Successful acquires always on the lookout for deals, look at 500, do 2 to 3. Keep a strategic focus - be strict about sticking to guidelines and overall corporate and acquisition strategy
Term
2. Reaching an initial agreement
Definition
Don't get bogged down over price -Identify Must Haves -Get Friendly - relationship capital
Term
3. Conducting due diligence - gearing up for negotiations
Definition
-Turn over all rocks -size up the other side -feed due diligence into business planning - keep original deal team involved throughout process
Term
4. Setting the final agreement- Getting to final terms
Definition
Negotiations on price and strategy - maintain momentum Use multiple negotiation channels - Managers, Lawyers, Investment Bankers -this allows for parallel processing, easier to send info, negotiating at different levels
Term
5. Closing - making it happen
Definition
Sell deal to stakeholders, p.r. and investor relations campaigns -Move fast, time is your enemy -deal management- source of competitive advantage
Term
Hostile takeover Tactics - Toehold, Bearhug, Tender Offer, Proxy Contest, Litigation
Definition
Toeholds- Hostile bidders generally buy target company shares prior to launching open bid. Buyer must discose intentions on schedule 13D when holdings reach 5%. Bearhugs- State or imply hostile firm will approach shareholders with a tender offer should acquisition be turned down Tender Offers- Offer made directly to target company's shareholders Proxy Contests- Using voting rights to contest seats on board of directors, management proposals, etc Litigation- Challenges board breaches fiduciary duties to stockholders
Term
Fiduciary Agents
Definition
Hostile bidders generally buy target company shares prior to launching open Board members required to act in the best interest of the corporation
Term
Two main fiduciary duties
Definition
Duty of Care - requires a board "to make informed and reasonable decision and to exercise reasonable supervision of the business" Duty of Loyalty - Mandates that board members act in good faith and in what they believe to be the best interest of the corporation
Term
M&A 7 Legal Factors to Consider
Definition
1. Company's Intrinsic Value- Not overpaying or selling too cheap 2. Nonprice Consideration 3. Reliability of Officers' Reports to the Board 4. Appropriateness of delegating negotiating authorityu to management 5. Reliability of Expert's Reports 6. Investment Banker's Fee Structure 7. Reasonableness of Any Defensive Tactics
Term
Merger Implementation Challenge H.P. Compaq
Definition
1. Operational and Strategic Integration (2) Two very large high tech companies (3) Established Cultures (4) Highly dynamic competitive environment
Term
Acquisition Integration Framework - 4 Integration Processes Critical
Definition
Process 1: Formulating the integration logic and performance goals (2) Creating the Integration plan (3) Executing operational integration-short term Process (4) Executing Strategic Integration - Long term
Term
Process 1: Formulating the Integration Logic and Performance Goals
Definition
Paticipants: B.O.D., Top Management, Consultants Integration Logic- Formulate new corporate strategy logic on how combination improves positioning Assumptions - Make assumptions about external environment to formulate short term and long term strategy and goals
Term
Process 2: Creating the Integration Plan - Pre-Deal Planning Activities
Definition
1. Identifying short-term goals for synergies 2. Workforce Reductions 3. Procurement rationalization 4. Phasing out redundant products 5. gettin the new organization up and running 6. preparation for process of executing operational integration
Term
Process 3: Executing operational integration
Definition
Focus - short term performance Difficult times - layoffs, new assignments, new org. structure, new sales teams call on worried customers
Term
Most urgent short term goals
Definition
1. Hold onto customers and achieve market share goals 2. achieve quarterly financial results 3. eliminate targeted product redundancies 4. Get procurement synergies 5. Select the right people 6. Get the organization to work
Term
Process 4: Executing Strategic Integration
Definition
Focus- Longterm Involves: Completing longer term operational integration tasks, completing multiyear strategic initiatives necessary to get ahead of envisioned competitive dynamics, feedback loop- helps test and revise key assumptions, logic, strategic initiatives
Term
Process of executing Strategic Integration - Must effectively cope with:
Definition
Where key competitors will be, Based on continuing to scan evolving environment, requires forcefully executing multi-year strategic initiatives
Supporting users have an ad free experience!