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Mergers, Acquisitions, and Corporate Restructurings, Sixth Edition Patrick A. Gaughan

Mergers, Acquisitions, and Corporate Restructurings, Sixth Edition By Patrick A. Gaughan

Mergers, Acquisitions, and Corporate Restructurings, Sixth Edition by Patrick A. Gaughan


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Summary

The comprehensive guide to mergers, acquisitions, and corporate restructurings Mergers, Acquisitions, and Corporate Restructurings is an all-inclusive guide to M&As that illustrates how restructuring can be used successfully, how each form works, and the laws that govern them.

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Mergers, Acquisitions, and Corporate Restructurings, Sixth Edition Summary

Mergers, Acquisitions, and Corporate Restructurings, Sixth Edition by Patrick A. Gaughan

The comprehensive guide to mergers, acquisitions, and corporate restructurings Mergers, Acquisitions, and Corporate Restructurings is an all-inclusive guide to M&As that illustrates how restructuring can be used successfully, how each form works, and the laws that govern them. This updated edition includes the latest statistics, research, graphs, and case studies on the private equity market, ethics, legal frameworks, and corporate governance, presented in a more approachable, manageable way. Written from a practical and historical perspective, this book carefully analyzes the strategies and motives that inspire M&As, the legalities involved each step of the way, and the offensive and defensive techniques used during hostile acquisitions. Corporate restructurings are indispensable in building a new generation of re-engineered companies with the power and resources to compete on the global playing field. This book covers the full spectrum of transactions, from megadeals to downsizing, and takes a fresh look at restructuring and how it is being used to revitalize and supercharge companies. * Learn how corporate restructuring helps companies compete * Discover the common impetus behind M&As * Understand the laws and rules that govern the field * Examine more effective strategies for hostile acquisitions The slowdown in the world's economy means that mergers and corporate restructuring will likely increase. It is essential for students and professionals to fully understand the concepts and mechanics behind these transactions, and Mergers, Acquisitions, and Corporate Restructurings is the comprehensive guide to the field.

About Patrick A. Gaughan

PATRICK A. GAUGHAN is President of Economatrix Research Associates, Inc., an economic and financial consulting firm serving a large number of Fortune 500 companies. The firm specializes in the application of economics and finance to litigated matters. He is often called upon to serve as an expert witness and measure damages in lawsuits, including those involving mergers and acquisitions. He has taught mergers and acquisitions for over twenty years and is a graduate-level professor of economics and finance at the Silberman College of Business, Fairleigh Dickinson University.

Table of Contents

Preface xi PART I: BACKGROUND Chapter 1: Introduction 3 Recent M&A Trends 3 Terminology 12 Valuing a Transaction 15 Types of Mergers 15 Merger Consideration 16 Merger Professionals 17 Merger Arbitrage 20 Leveraged Buyouts and the Private Equity Market 21 Corporate Restructuring 21 Merger Negotiations 23 Merger Agreement 30 Merger Approval Procedures 30 Deal Closing 32 Short-Form Merger 33 Freeze-Outs and the Treatment of Minority Shareholders 33 Reverse Mergers 34 Holding Companies 38 Chapter 2: History of Mergers 41 Merger Waves 41 What Causes Merger Waves? 42 First Wave, 1897 1904 42 Second Wave, 1916 1929 48 The 1940s 49 Third Wave, 1965 1969 49 Trendsetting Mergers of the 1970s 56 Fourth Wave, 1984 1989 62 Fifth Wave 67 Sixth Merger Wave 73 Chapter 3: Legal Framework 75 Laws Governing Mergers, Acquisitions, and Tender Offers 76 Other Specific Takeover Rules in the United States 88 International Securities Laws Relating to Takeovers 89 U.S. State Corporation Laws and Legal Principles 98 State Antitakeover Laws 101 Regulation of Insider Trading 109 Antitrust Laws 111 Measuring Concentration and Defining Market Share 117 European Competition Policy 121 Chapter 4: Merger Strategy 125 Growth 125 Synergy 136 Operating Synergy 138 Diversification 148 Types of Focus Increases 154 Focus Increasing Asset Sales Increase Firm Values 154 Explanation for the Diversification Discount 155 Do Diversified or Focused Firms Do Better Acquisitions? 159 Other Economic Motives 159 Hubris Hypothesis of Takeovers 169 Do Managerial Agendas Drive M&A? 173 Other Motives 177 PART II: HOSTILE TAKEOVERS Chapter 5: Antitakeover Measures 187 Management Entrenchment Hypothesis versus Stockholder Interests Hypothesis 188 Rights of Targets Boards to Resist: United States Compared to the Rest of the World 189 Preventative Antitakeover Measures 189 Changing the State of Incorporation 214 Active Antitakeover Defenses 214 Information Content of Takeover Resistance 247 Chapter 6: Takeover Tactics 249 Preliminary Takeover Steps 250 Tender Offers 257 Advantages of Tender Offers over Open Market Purchases 272 Proxy Fights 279 Chapter 7: Hedge Funds as Activist Investors 291 Macroeconomic Foundations of the Growth of Activist Funds 294 Hedge Funds as Acquirers 301 PART III: GOING-PRIVATE TRANSACTIONS AND LEVERAGED BUYOUTS Chapter 8: Going-Private Transactions and Leveraged Buyouts 311 Terminology 311 Historical Trends in LBOs 312 Management Buyouts 319 Conflicts of Interest in Management Buyouts 323 U.S. Courts Position on Leveraged Buyout Conflicts 325 Financing for Leveraged Buyouts 332 Returns to Stockholders from LBOs 340 Returns to Stockholders from Divisional Buyouts 341 Empirical Research on Wealth Transfer Effects 346 Protection for Creditors 347 Intra-industry Effects of Buyouts 347 Chapter 9: The Private Equity Market 349 History of the Private Equity and LBO Business 349 Private Equity Market 350 Secondary Market for Private Equity Investments 369 Chapter 10: The Junk Bond and the Leveraged Loan Market and Stapled Financing 371 History of the Junk Bond Market 371 Leveraged Loan Market 382 Stapled Financing 386 PART IV: CORPORATE RESTRUCTURING Chapter 11: Corporate Restructuring 391 Divestitures 393 Divestiture and Spin-Off Process 404 Market Liquidity and the Decision to Divest a Unit 406 Round-Trip Wealth Effects 406 Wealth Effects of Sell-Offs 407 Managerial Ownership and Sell-Off Gains 410 Activists and Sell-Offs 410 Shareholder Wealth Effects of Spin-Offs: U.S. versus Europe 416 Equity Carve-Outs 421 Voluntary Liquidations or Bust-Ups 427 Tracking Stocks 428 Master Limited Partnerships and Sell-Offs 430 Chapter 12: Restructuring in Bankruptcy 433 Types of Business Failure 434 Causes of Business Failure 435 Bankruptcy Trends 440 U.S. Bankruptcy Laws 444 Reorganization versus Liquidation 445 Reorganization Process 446 Benefits of the Chapter 11 Process for the Debtor 453 Prepackaged Bankruptcy 457 Workouts 461 Corporate Control and Default 469 Liquidation 469 Investing in the Securities of Distressed Companies 471 Chapter 13: Corporate Governance 477 Structure of Corporations and Their Governance 477 Golden Parachutes 486 CEO Severance Payments 490 Reform of Excesses of Golden Parachutes and Severance Payments 491 Managerial Compensation, Mergers, and Takeovers 491 CEO Compensation and Power 493 Compensation Characteristics of Boards That Are More Likely to Keep Agency Costs in Check 496 Role of the Board of Directors 496 Regulatory Standards for Directors 506 Antitakeover Measures and Board Characteristics 507 Disciplinary Takeovers, Company Performance, CEOs, and Boards 510 Merger Strategy and Corporate Governance 511 CEO Compensation and M&A Programs 511 Do Boards Reward CEOs for Initiating Acquisitions and Mergers? 512 CEO Compensation and Diversification Strategies 513 Agency Costs and Diversification Strategies 513 Interests of Directors and M&As 514 Managerial Compensation and Firm Size 516 Corporate Control Decisions and Their Shareholder Wealth Effects 516 Does Better Corporate Governance Increase Firm Value? 518 Corporate Governance and Competition 519 Executive Compensation and Postacquisition Performance 519 Mergers of Equals and Corporate Governance 520 Chapter 14: Joint Ventures and Strategic Alliances 531 Contractual Agreements 531 Comparing Strategic Alliances and Joint Ventures with Mergers and Acquisitions 532 Joint Ventures 532 Strategic Alliances 538 Chapter 15: Valuation 547 Valuation Methods: Science or Art? 549 Managing Value as an Antitakeover Defense 550 Benchmarks of Value 550 How the Market Determines Discount Rates 562 Valuation of the Target s Equity 575 Marketability of the Stock 575 Takeovers and Control Premiums 578 Valuation of Stock-for-Stock Exchanges 583 Shareholder Wealth Effects and Methods of Payment 583 Exchange Ratio 589 Fixed Number of Shares versus Fixed Value 597 Merger Negotiations and Stock Offers: Halliburton vs Baker Hughes 597 International Takeovers and Stock-for-Stock Transactions 598 Desirable Financial Characteristics of Targets 598 Chapter 16: Tax Issues in M&A 607 Financial Accounting for M&As 608 Taxable versus Tax-Free Transactions 608 Tax Consequences of a Stock-for-Stock Exchange 611 Asset Basis Step-Up 612 Changes in the Tax Laws 613 Role of Taxes in the Merger Decision 614 Role of Taxes in the Choice of Sell-Off Method 616 Organizational Form and M&A Premiums 616 Capital Structure and Propensity to Engage in Acquisitions 617 Leverage and Deal Structure 618 Taxes as a Source of Value in Management Buyouts 618 Miscellaneous Tax Issues 619 Glossary 623 Index 633

Additional information

CIN1118997549VG
9781118997543
1118997549
Mergers, Acquisitions, and Corporate Restructurings, Sixth Edition by Patrick A. Gaughan
Used - Very Good
Hardback
John Wiley & Sons Inc
20150518
688
N/A
Book picture is for illustrative purposes only, actual binding, cover or edition may vary.
This is a used book - there is no escaping the fact it has been read by someone else and it will show signs of wear and previous use. Overall we expect it to be in very good condition, but if you are not entirely satisfied please get in touch with us

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