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Mergers, Acquisitions, and Corporate Restructurings, Fourth Edition

Name: Mergers, Acquisitions, and Corporate Restructurings, Fourth Edition
Author: NY Patrick A. Gaughan New York
ISBN: 9780471705642

by NY Patrick A. Gaughan New York

February 2007

Intermediate to advanced

648 pages

22h 46m

English

Wiley

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Copyright
Preface
About the Web Site
1. Background
1. Introduction
Recent M&A TrendsDefinitionsValuing a TransactionTypes of MergersReasons for Mergers and AcquisitionsMerger FinancingMerger ProfessionalsMerger ArbitrageLeveraged Buyouts and the Private Equity MarketCorporate RestructuringMerger NegotiationsDisclosure of Merger NegotiationsMerger Approval ProceduresSpecial Committees of the Board of DirectorsFairness OpinionsVoting ApprovalShort-Form MergerFreezeouts and the Treatment of Minority ShareholdersPurchase of Assets Compared with Purchase of StockStructuring the DealAssumption of the Seller’s LiabilitiesAdvantages of Asset AcquisitionsAsset SelloffsReverse MergersHolding CompaniesAdvantagesDisadvantagesSpecial Purchase Acquisition Vehicles
2. History of Mergers
Merger WavesWhat Causes Merger Waves?First Wave, 1897–1904Second Wave, 1916–1929The 1940sThird Wave, 1965–1969Management Science and ConglomeratesIndustry Concentration and the Conglomerate WaveShareholder Wealth Effects of Diversification During the Conglomerate WavePrice-Earnings Game and the Incentive to MergeAccounting Manipulations and the Incentive to MergeDecline of the Third Merger WavePerformance of ConglomeratesTrendsetting Mergers of the 1970sINCO versus ESB MergerUnited Technologies versus Otis ElevatorColt Industries versus Garlock IndustriesFourth Wave, 1984–1989Role of the Corporate RaiderOther Unique Characteristics of the Fourth WaveAggressive Role of Investment BankersIncreased Sophistication of Takeover StrategiesMore Aggressive Use of DebtLegal and Political StrategiesInternational TakeoversRole of DeregulationWhy the Fourth Merger Wave EndedFifth WaveIndustry Concentration During the Fifth WaveFad of the Fifth Merger Wave: Roll-Ups and Consolidations of IndustriesFifth Merger Wave in Europe, Asia, and Central and South AmericaPerformance of Fifth Merger Wave AcquirersPrivatization of State-Owned EnterprisesEmerging Market AcquirersEuropean Protectionism During the 2000sSummary
3. Legal Framework
Laws Governing Mergers, Acquisitions, and Tender OffersSecurities LawsFiling of an 8KFiling of an S-4Williams ActSection 13(d) of the Williams ActSchedule 13DAmendments Required under Section 13(d)(2)Remedies for Failure to Comply with Section 13(d)Schedule 13GEmployee Stock Ownership PlansSection 14(d) and Regulation M-ASchedule TOInformation Requested on Schedule TOCommencement of the OfferPosition of the Target CorporationTime Periods of the Williams ActMinimum Offer PeriodWithdrawal RightsPro Rata AcceptanceDefinition of a Tender OfferMaterials That Shareholders ReceiveMethod of Tendering SharesChanges in the Tender OfferBest Price Rule and Other Related RulesBidder Purchases Outside of Tender OfferPayment Following Completion of the OfferMini-Tender OffersTaking Control after a Successful Tender OfferDe-listing the TargetCompeting Tender OffersApplicability of U.S. Tender Offer Rules to Takeovers of Non-U.S. CompaniesOther Specific Takeover Rules in the United StatesStock Exchange RegulationsRegulation of Proxy SolicitationInternational Securities Laws Relating to TakeoversEuropeGreat BritainEuropean UnionFranceGermanyIrelandNetherlandsSpainRussian Tender Offer RulesCanadaAsiaJapanKoreaChinaTaiwanIndiaAustraliaBusiness Judgment RuleUnocal StandardRevlon DutiesState Antitakeover LawsGenesis of State Antitakeover Laws in the United StatesKey Court Decisions Relating to Antitakeover LawsEdgar v. MITEDynamics v. CTSAmanda Acquisition Corporation v. Universal Foods CorporationComponents of Second-Generation LawsFair Price ProvisionBusiness Combination ProvisionControl Share ProvisionCash-Out StatuteDelaware Antitakeover LawWhy Do State Antitakeover Laws Get Passed?Wealth Effects of State Antitakeover LawsState Antitrust ActionsRegulation of Insider TradingWho Are Insiders?Insider Trading Scandals of the 1980sDo Insider Trading Laws Effectively Deter Insider Trading?Antitrust LawsSherman Antitrust ActClayton ActFederal Trade Commission Act of 1914Celler-Kefauver Act of 1950Hart-Scott-Rodino Antitrust Improvements Act of 1976Size Requirements for FilingFiling FeesWho Must FileType of Information to Be FiledAntitrust Premerger Review Time PeriodsAll-Cash OffersSecurities OffersImpact of Notice of Government OppositionDeadlines for FilingFederal Trade Commission Rules on Creeping AcquisitionsFTC Rules for Second Requests and Speed of Takeover CompletionExemptions to the Hart-Scott-Rodino ActAntitrust Approval of International MergersEnforcement of Antitrust Laws: Justice Department and Federal Trade Commission InteractionRecent Trends in Antitrust Enforcement in the United StatesMeasuring Concentration and Defining Market ShareThe 1968 Justice Department Merger GuidelinesThe 1982 Justice Department GuidelinesProperties of the HH IndexExample of the HH Index1984 Justice Department GuidelinesThe 1992 Merger GuidelinesEuropean Competition PolicyAntitrust RemediesSummary
4. Merger Strategy
GrowthAchieving Growth in a Slow-Growth Industry through AcquisitionsIs Growth or Increased Return the More Appropriate Goal?International Growth and Cross-Border AcquisitionsSynergyOperating SynergyRevenue-Enhancing Operating SynergyCost-Reducing Operating SynergiesCost Economies in Banking Mergers: United States Compared with EuropeSynergy and Acquisition PremiumsFinancial SynergyDiversificationDiversification and the Acquisition of Leading Industry Positions“Portfolio” Management of Business UnitsDiversification to Enter More Profitable IndustriesFinancial Benefits of DiversificationEmpirical Evidence on Acquisition Programs of the 1960sPositive Evidence of Benefits of ConglomeratesIs There a Diversification Discount?Related versus Unrelated DiversificationOther Economic MotivesHorizontal IntegrationMarket PowerSocial Costs of Increased ConcentrationEmpirical Evidence on the Monopoly HypothesisHorizontal Integration, Consolidation, and Roll-Up Acquisition ProgramsVertical IntegrationMotives for Vertical IntegrationHubris Hypothesis of TakeoversEmpirical EvidenceWinner’s Curse Hypothesis of TakeoversDo Bad Bidders Become Good Targets?Executive Compensation and Corporate Acquisition DecisionsOther MotivesImproved ManagementImprove Research and DevelopmentImprove DistributionTax MotivesSummary
2. Hostile Takeovers
5. Antitakeover Measures
Management Entrenchment Hypothesis versus Stockholder Interests HypothesisPreventative Antitakeover MeasuresEarly Warnings Systems: Monitoring Shareholding and Trading PatternsTypes of Preventative Antitakeover MeasuresFirst-Generation Poison Pills: Preferred Stock PlansSecond-Generation Poison Pills: Flip-Over RightsHousehold International and the Legality of Poison PillsThird-Generation Poison Pills: Flip-In Poison PillsBack-End PlansVoting PlansMechanics of Issuing Poison PillsBlank Check Preferred StockDead Hand, Slow Hand, and No Hand ProvisionsShadow PillCourt Rulings Limiting the Use of Poison PillsCorporate Governance and “Chewable” PillsImpact of Poison Pills on Stock PricesImpact of Poison Pills on Takeover PremiumsPoison Pills and the Auction ProcessConclusion of Research on Shareholder Wealth Effects of Poison PillsPoison PutsCorporate Charter AmendmentsStaggered Board AmendmentsStaggered Board ResearchSupermajority ProvisionsLegality of Supermajority ProvisionsSupermajority Provision Shareholder Wealth EffectsFair Price ProvisionsShareholder Wealth Effects of Fair Price ProvisionsDual CapitalizationWhy Do Dual Class Recapitalizations Get Approved?Shareholder Wealth Effects of Dual CapitalizationsAntigreenmail ProvisionsRestrictions on Ability to Call an ElectionAntitakeover Amendments and Managerial Ownership ResearchGolden SharesGolden ParachutesShareholder Wealth Effects of Golden Parachute AgreementsMechanics of Golden ParachutesLegality of Golden ParachutesCriticism of Golden ParachutesGolden Parachutes and Huge Acquisition Payouts of the 2000sChanging the State of IncorporationShareholder Wealth Effects of ReincorporationActive Antitakeover DefensesGreenmailLegality of Differential Payments to Large-Block ShareholdersShareholder Wealth Effects of GreenmailCorporate Finance of Share RepurchasesDecline of GreenmailEvolution of the GreenmailerStandstill AgreementsShareholder Wealth Effects of Standstill AgreementsWhite KnightsTakeover Tactics and Shareholder Concentration: United States Compared with EuropeShareholder Wealth Effects of White Knight BidsWhite Squire DefenseMerger Agreement ProvisionsLockup TransactionsTermination, Breakup, and Topping FeesNo-Shop ProvisionsCapital Structure ChangesRecapitalizeComparison between Recapitalization Plans and LBOsUse of Recapitalization Plans Protected by Poison PillsShareholder Wealth Effects of Recapitalization PlansAssume More DebtIssue More SharesShare Issuance and ESOPsBuy Back SharesImplementing a Share Repurchase ProgramDiscriminatory Self-Tenders: Unocal versus MesaMarket Reaction to the Unocal DecisionCorporate Restructuring as a Takeover DefenseLitigation as an Antitakeover DefenseLitigation ResearchPac-Man Defense“Just Say No”Just Say No Reconciled with Revlon DutiesInformation Content of Takeover ResistanceSummary

6. Takeover Tactics
Preliminary Takeover StepsEstablishing a Toe HoldCasual PassBear HugsTender OffersOpen Market PurchasesHistory of the Tender OfferReason for Using a Tender OfferSuccess Rate of Tender OffersCash versus Securities Tender OffersTen-Day Window of the Williams ActResponse of the Target ManagementTender Offers and Keeping Management HonestCreation of a Tender Offer TeamTwo-Tiered Tender OffersRegulation of Two-Tiered Tender OffersEffect of Two-Tiered Tender Offers on Stockholder WealthAny-and-All versus Partial Tender OffersEmpirical Evidence on the Effects of Tender OffersWealth Effects of Unsuccessful Tender OffersTargetBidderTender Offer Premiums and Director IndependenceAre “Bad Bidders” More Likely to Become Targets?Open Market Purchases and Street SweepsAdvantages of Tender Offers over Open Market PurchasesArbitragers and Takeover TacticsArbitrage and the Downward Price Pressures Around M&A AnnouncementsProxy FightsProxy Fight DataCorporate ElectionsVoting by ProxyCalling a Stockholders’ MeetingRecord DateShares Held in Street NamesDifferent Types of Proxy ContestsRegulation of Proxy ContestsProxy Contests: From the Insurgents’ ViewpointTarget Size and Proxy Fight SuccessEffectiveness of Shareholder ActivismProxy Fight ProcessVoting AnalysisCosts of a Proxy FightShareholder Wealth Effects of Proxy ContestsEarly ResearchLater ResearchValue of Shareholders’ VotesNature of the Dissidents and Dissident CampaignsLong-Term Effects of Proxy ContestsWhat Determines the Choice of a Tender Offer versus a Proxy Fight?Combination of a Proxy Fight and a Tender OfferSummary
3. Going Private Transactions and Leveraged Buyouts
7. Leveraged Buyouts
TerminologyHistorical Trends in LBOsEarly Origins of LBOsTrends in LBOs: 1980s–2005Globalization of LBOsCosts of Being a Public CompanyManagement BuyoutsConflicts of Interest in Management BuyoutsPost-Buyout Managerial OwnershipGoing Private Premiums and P/Es OfferedSources of LBO GainsEfficiency GainsTax BenefitsCash Flow versus Asset-based LBOsInvestment Banks and LBOsLeveraged Recapitalizations as an Alternative to an LBOFinancing for Leveraged BuyoutsSecured LBO FinancingSenior DebtIntermediate-Term DebtDesirable Characteristics of Secured Leveraged Buyout CandidatesCosts of Secured DebtSources of Secured FinancingFinancing GapUnsecured LBO FinancingCapital Structure of LBOsSources of LBO FinancingTypes of LBO RiskLBOs and the Probability of BankruptcyReturns to Stockholders from LBOsReturns to Stockholders from Divisional BuyoutsPost-LBO Firm PerformanceOverall Operating PerformanceEmployment EffectsResearch and DevelopmentCapital SpendingEffect of LBOs on PricesReverse LBOsReverse LBO ResearchLBO Regulation and Disclosure: SEC Rule 13e-3Leveraged Buyouts as White KnightsLeveraged Buyouts, the Position of Other Debt Holders, and Wealth TransfersEmpirical Research on Wealth Transfer EffectsProtection for CreditorsBankruptcy Proceedings and Pre-LBO Creditors’ InterestsSummary
8. Trends in the Financing of Takeovers and Going Private Transactions Including Hedge Funds and Private Equity Funds
Trends in Cash versus Stock Percentage of Takeover FinancingDebt Financing and the Cash Component of OffersInternational Stock-for-Stock Deals: Currency IssuesShareholder Wealth Effects and Methods of PaymentTarget Companies: Short-Term Effects of Method of PaymentAcquiring Companies: Short-Term Effects of Method of PaymentAcquiring Companies: Long-Term Effects of Method of PaymentMethod of Payment and Managerial OwnershipMethod of Payment, Managerial Ownership, and Executive Job RetentionInformation Asymmetry, Payment Choice, and Announcement Bidder PerformanceInstitutional Ownership, Blockholders, and Stock FinancingPrivate Equity MarketSeller versus Private Equity Fund Valuations and NegotiationsExample of a Partial Equity Investment by Private Equity FirmExample of a Total Acquisition by a Private Equity FirmM&A Opportunities after Private Equity Cash OutLeading Private Equity FirmsPrivate Equity Fund Partnerships and “Club Deals”Sales to Other Private Equity BuyersCompanies that May be Better in the Hands of “Financial Buyers”Private Equity Fund InvestorsPrivate Equity Returns and FeesFinancial Engineeering and Private Equity Deals in the 2000sDividend RecapitalizationsManagement and Termination FeesCharacteristics of Private Equity ReturnsHedge FundsHedge Funds and M&AsHedge Funds as Sources of M&A Debt FinancingHedge Fund Activism and Corporate GovernanceHedge Fund RegulationComparison of Private Equity Funds and Hedge FundsHedge Fund FeesFunds of Hedge FundsHedge Fund and Private Equity Fund ConvergenceHedge Fund ReturnsJunk Bonds Financing of TakeoversHistory of the Junk Bond MarketWhy the Junk Bond Market GrewHistorical Role of Drexel Burnham LambertInvestment Bankers and Highly Confident LettersInvestment Banks and Liquidity of Junk Bond InvestmentsJunk Bond Refinancing and Bridge LoansCollapse of the Junk Bond Market in the Late 1980sLTV BankruptcyFinancing Failures of 1989Default of Integrated ResourcesBankruptcy of Drexel Burnham LambertBanking RegulationFate of the Big Junk Bond IssuersDecline in the Use of Junk Bonds as a Source of M&A FinancingRole of Junk Bond Research in the Growth of the Market in the Fourth WaveJunk Bond Defaults and AgingOther Junk Bond ResearchJunk Bond Recovery RatesConclusion of the Junk Bond Default ResearchChanging Role of Junk Bond Financing in Takeovers and Corporate FinanceLeveraged Loan Market as an Alternative to Junk Bond Deal FinancingImpact of Leveraged Loans on Junk Bond Indenture ContractsImpact of Sarbanes-Oxley on the Competitiveness of Junk Bond FinancingDefault, Recovery, and Loss Rates: Leveraged Loans versus Junk BondsExpansion of Banks Originating Leveraged LoansStapled FinancingSecuritization and M&A FinancingOrigins of ABSs for M&AsSummary
9. Employee Stock Ownership Plans
Historical Growth of ESOPsTypes of PlansDefined Benefit PlansDefined Contribution PlansCharacteristics of ESOPsAverage ContributionLeveraged versus Unleveraged ESOPsCorporate Finance Uses of ESOPsBuyoutsDivestituresRescue of Failing CompaniesRaising CapitalVoting of ESOP SharesApproval for the Establishment of an ESOPCash Flow ImplicationsValuation of Stock Contributed into an ESOPEligibility of ESOPsPut Options of ESOPsDividends PaidESOPs versus a Public Offering of StockEmployee Risk and ESOPsSecurities Laws and ESOPsTax Benefits of LESOPsDeductibility of Interest and Principal PaymentsOther Tax Benefits of ESOPsEmployee/Shareholder BenefitsEmployer Corporation Benefits: Dividend DeductionAbility to Use Loss CarryforwardsBalance Sheet Effects of ESOPsDrawbacks of LESOPsEquity Dilution EffectsDistributional Effects of ESOPsLoss of ControlESOPs and Corporate PerformanceEmployee Stock Ownership and Corporate StabilityFiduciary Responsibilities and ESOPsESOPs as an Antitakeover DefenseEffectiveness of ESOPs as an Antitakeover DefenseESOPs and Shareholder WealthESOPs and LBOsLeveraged ESOP-LBO ProcessESOPs versus Management BuyoutsSummary
4. Corporate Restructuring
10. Corporate Restructuring
DivestituresHistorical TrendsGlobal Divestiture TrendsDivestiture Likelihood and Prior AcquisitionsInvoluntary versus Voluntary DivestituresReasons for Voluntary DivestituresPoor Fit of DivisionReverse SynergyPoor PerformanceCapital Market FactorsCash Flow FactorsAbandoning the Core BusinessDivestiture and Spinoff ProcessFinancial Evaluation of DivestituresSpinoffsTrends in SpinoffsInvoluntary SpinoffsDefensive SpinoffsTax Consequences of SpinoffsTreatment of Warrants and Convertible SecuritiesSeller Financing AssistanceAllocation of Debt Obligations and Bond LiabilitiesEmployee Stock Option PlansWealth Effects of SelloffsEarly ResearchOppenheimer (1981)Kudla and McInish (1983)Miles and Rosenfeld (1983)Price Effects of Voluntary Selloffs: Summary of Later ResearchShareholder Wealth Effects of Spinoffs: Parent and Subsidiary Effects EvidenceJ. P. Morgan’s Spinoffs StudiesRationale for a Positive Stock Price Reaction to SelloffsWealth Effects of Voluntary Defensive SelloffsWealth Effects of Involuntary SelloffsWealth Effects of Selloffs on BuyersCorporate Focus and SpinoffsEquity Carve-outsEquity Carve-out Transactions Data: J. P. Morgan StudyCharacteristics of Equity Carve-out Firms and the Disposition of Carve-out ProceedsEquity Carve-outs versus Public OfferingsEquity Carve-outs versus SpinoffsVoluntary Liquidations, or BustupsShareholder Wealth Effects of Voluntary BustupsTracking StocksMaster Limited Partnerships and SelloffsSummary
11. Restructuring in Bankruptcy
Types of Business FailureEconomic FailureFinancial FailureCosts of Financial DistressCauses of Business FailureCauses of Financial Distress Following Leveraged RecapitalizationsBankruptcy TrendsFraud-Related BankruptciesComment on Largest Bankruptcies DataU.S. Bankruptcy LawsChanges in the U.S. Bankruptcy LawsReorganization versus LiquidationReorganization ProcessBankruptcy Petition and the FilingFiling LocationDebtor in PossessionAutomatic StayTime Line in the Reorganization ProcessDuration of the Chapter 11 ProcessUse of Secured Creditors’ CollateralDuties of the Debtor in PossessionCreditors’ CommitteesDebtor’s Actions and Its SupervisionExclusivity PeriodObtaining Postpetition CreditReorganization PlanCramdownFairness and Feasibility of the PlanPartial Satisfaction of Prepetition ClaimsBenefits of the Chapter 11 Process for the DebtorCompany Size and Chapter 11 BenefitsProjections Done in Chapter 11Postbankruptcy Capital Structure and SuccessPrepackaged BankruptcyBenefits of Prepackaged BankruptcyPrevoted versus Postvoted PrepacksTax Advantages of Prepackaged BankruptcyWorkoutsBenefits of WorkoutsRecognizing Better Workout CandidatesEvidence on Role of Transactions Costs in Voluntary Restructuring versus Chapter 11 DecisionAcquisitions Following BankruptcyCorporate Control and DefaultLeveraged Buyouts and Bankruptcy ProceedingsLitigation Liabilities and Chapter 11LiquidationInvesting in the Securities of Distressed CompaniesReturns on Distressed Debt SecuritiesControl Opportunities Using Distressed Debt SecuritiesRole of Vulture Investors and the Market for Control of Distressed FirmsSummary
12. Corporate Governance
Failed Corporate Governance: Accounting ScandalsSarbanes-Oxley ActOther Regulatory ChangesCorporate GovernanceCorporate DemocracyAgency CostsCEO Compensation and Agency CostsManagerial Compensation, Mergers, and TakeoversCompensation Characteristics of Boards That Are More Likely to Keep Agency Costs in CheckManagement Perks, Agency Costs, and Firm ValueInterlocking BoardsIndependence of DirectorsNew Bright Line Standards for DirectorsCompensation, Board Size, and Corporate GovernanceCEO Compensation and PowerDisciplinary Takeovers, Company Performance, CEOs, and BoardsMerger Strategy and Corporate GovernanceDo Boards Reward CEOs for Initiating Acquisitions and Mergers?CEO Compensation and Diversification StrategiesAgency Costs and Diversification StrategiesInterests of Directors and M&AsManagerial Compensation and Firm SizeCorporate Control Decisions and Their Shareholder Wealth EffectsDoes Better Corporate Governance Increase Firm Value?Executive Compensation and Postacquisition PerformanceMergers of Equals and Corporate GovernanceSummary
13. Joint Ventures and Strategic Alliances
Contractual AgreementsComparing Strategic Alliances and Joint Ventures with Mergers and AcquisitionsJoint VenturesMotives for Joint VenturesRegulation and Joint VenturesShareholder Wealth Effects of Joint VenturesShareholder Wealth Effects by Type of VentureRestructuring and Joint VenturesPotential Problems with Joint VenturesStrategic AlliancesGovernance of Strategic AlliancesShareholder Wealth Effects of Strategic AlliancesShareholder Wealth Effects by Type of AllianceWhat Determines the Success of Strategic Alliances?Summary
14. Valuation
Valuation Methods: Science or Art?Managing Value as an Antitakeover DefenseBenchmarks of ValueBook ValueLiquidation ValueDiscounted Future Cash Flows or Net Present Value ApproachContinuing ValueAdjustments to DCF Enterprise ValueArriving at Equity Value Using Enterprise ValueDefining Free Cash FlowsFree Cash Flow Theory of Mergers, Acquisitions, and Leveraged BuyoutsAccuracy of Discounted Cash Flows: Evidence from Highly Leveraged TransactionsChoice of the Discount RateCost of Capital and the Discount RateCost of DebtCost of Preferred StockCost of Common StockAcquirer’s Hurdle RateHow the Market Determines Discount RatesDiscount Rate and RiskCross-Border Acquisitions and RiskChanging Interest Rates and Acquisition Prices: Evidence from the Fifth Merger WaveReal Options in ValuationComparable MultiplesEstablishing ComparabilityDealing with OutliersUsing P/E MultiplesValuation of the Target’s EquityTakeovers and Control PremiumsSupply and Demand Factors and Takeover PricesMarketability of the StockData Reliability and Fraudulent InaccuraciesRole of Arbitragers and Impact on PricesValuation Effects of Mergers and AcquisitionsWhat Types of Acquiring Firms Tend to Perform the Poorest?Control Premiums and Target Shareholder ReturnsHistorical Trends in Merger PremiumsStock Market Activity and Merger PremiumsDeterminants of Acquisition PremiumsPremiums from Strategic MergersPremiums and Mergers of EqualsDoes the Market Value Control Independent of Takeovers?Valuation of Stock-for-Stock ExchangesStock-for-Stock Exchanges and AuctionsTax Incentives for Stock versus Cash TransactionsRisk Effects: Stock versus CashLegal Issues in Stock-Financed TransactionsExchange RatioEarnings per Share of the Surviving CompanyCriteria for Dilution in EPSHighest Offer Price without Dilution in EPSFactors That Influence Initial Changes in Earnings per ShareBootstrapping Earnings per SharePostmerger P/E RatioFixed Number of Shares versus Fixed ValueInternational Takeovers and Stock-for-Stock TransactionsDesirable Financial Characteristics of TargetsValuation of Private BusinessesReported Taxable IncomePublic Corporations and the Reporting of IncomeFactors to Consider When Valuing Closely Held BusinessesAcquisition MultiplesAdjustments to Valuation MethodsMinority DiscountsApplying Marketability and Minority DiscountsValuation Research on Takeovers of Privately Held CompaniesSummaryAppendixDiscounted Cash Flow AnalysisOther FactorsSum-of-the-Parts Breakup AnalysisSale of Business Information U.S. for CashAcquiror TargetsPublic Market Valuation for Media Measurement and InformationPublic Market Valuation for Marketing Information
15. Tax Issues
Financial AccountingPurchase MethodEffect of Accounting Treatment on Stock PricesTaxable versus Tax-Free TransactionsTax-Free ReorganizationsType A ReorganizationType B ReorganizationType C ReorganizationType D ReorganizationTax Consequences of a Stock-for-Stock ExchangeTaxable Purchases of StockTaxable Purchases of AssetsTaxable versus Partially Taxable TransactionsTax Loss CarryforwardsTax Loss Carryforward ResearchAcquiring Firm’s Treatment of Target’s Tax BenefitsAsset Basis Step-UpChanges in the Tax LawsGeneral Utilities DoctrineElimination of the Morris TrustReal Estate Investment TrustsRole of Taxes in the Merger DecisionEffects of Increased LeverageTaxes as a Source of Value in Management BuyoutsLeveraged Buyouts and Tax RevenuesMiscellaneous Tax IssuesTaxes and Golden ParachutesTaxes and Termination FeesTaxes and GreenmailSummary
Glossary

Overview

Modern restructuring techniques for a global business landscape

Corporate restructurings are an indispensable tool in building a new generation of re-engineered companies with the power and resources to compete on a global playing field. Written from a practical and historical perspective, Mergers, Acquisitions, and Corporate Restructurings, Fourth Edition carefully analyzes the strategies and motives that inspire M&As, the laws and rules that govern the field, as well as the offensive and defensive techniques of hostile acquisitions.

In this thoroughly revised Fourth Edition, author and business valuation expert Patrick Gaughan provides a fresh perspective on M&As in today's global business landscape, and how your company can reap the benefits from the various forms of restructurings available. Packed with the most up-to-date research, graphs, and case studies, Mergers, Acquisitions, and Corporate Restructurings, Fourth Edition explores:
* Recent takeover trends including the role of private equity firms and hedge funds
* Most effective offensive and defensive tactics in hostile bids
* A review of the effect of shareholder wealth on a variety of takeover actions
* Modern, historical, and global perspectives on the field
* The various forms of downsizing including divestitures, spinoffs, and equity carve-outs
* Bankruptcy as an effective restructuring technique
* Latest developments in corporate governance
* Pros and cons of joint ventures and strategic alliances
* Primary methods used to value public and private companies

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