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Mergers, Acquisitions, and Corporate Restructurings Patrick A. Gaughan

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

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


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Mergers, Acquisitions, and Corporate Restructurings Summary

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

The essential M&A primer, updated with the latest research and statistics Mergers, Acquisitions, and Corporate Restructurings provides a comprehensive look at the field's growth and development, and places M&As in realistic context amidst changing trends, legislation, and global perspectives. All-inclusive coverage merges expert discussion with extensive graphs, research, and case studies to show how M&As can be used successfully, how each form works, and how they are governed by the laws of major countries. Strategies and motives are carefully analyzed alongside legalities each step of the way, and specific techniques are dissected to provide deep insight into real-world operations. This new seventh edition has been revised to improve clarity and approachability, and features the latest research and data to provide the most accurate assessment of the current M&A landscape. Ancillary materials include PowerPoint slides, a sample syllabus, and a test bank to facilitate training and streamline comprehension. As the global economy slows, merger and acquisition activity is expected to increase. This book provides an M&A primer for business executives and financial managers seeking a deeper understanding of how corporate restructuring can work for their companies. Understand the many forms of M&As, and the laws that govern them Learn the offensive and defensive techniques used during hostile acquisitions Delve into the strategies and motives that inspire M&As Access the latest data, research, and case studies on private equity, ethics, corporate governance, and more From large megadeals to various forms of downsizing, a full range of restructuring practices are currently being used to revitalize and supercharge companies around the world. Mergers, Acquisitions, and Corporate Restructurings is an essential resource for executives needing to quickly get up to date to plan their own company's next moves.

About Patrick A. Gaughan

PATRICK A. GAUGHAN is President of Economatrix Research Associates, an economic and financial consulting firm. The firm specializes in the application of economics and finance to litigated matters. Dr. Gaughan also provides various consulting services in the field of mergers and acquisitions and valuation. Dr. Gaughan is also a Professor at the University of International Business and Economics in Beijing, China.

Table of Contents

Preface xi Part I: Background Chapter 1: Introduction 3 Recent M&A Trends 3 Terminology 11 Valuing a Transaction 13 Types of Mergers 13 Merger Consideration 14 Merger Professionals 15 Merger Arbitrage 18 Leveraged Buyouts and the Private Equity Market 19 Corporate Restructuring 20 Merger Negotiations 21 Deal Structure: Asset versus Entity Deals 24 Merger Agreement 28 Merger Approval Procedures 29 Deal Closing 31 Short-Form Merger 31 Freezeouts and the Treatment of Minority Shareholders 32 Appraisal Arbitrage 33 Reverse Mergers 34 Chapter 2: History of Mergers 41 Merger Waves 41 First Wave, 1897-1904 43 Second Wave, 1916-1929 48 The 1940s 49 Third Wave, 1965-1969 49 Trendsetting Mergers of the 1970s 54 Fourth Wave, 1984-1989 59 Fifth Wave, 1992-2001 64 Sixth Wave, 2004-2007 68 Chapter 3: Legal Framework 71 Laws Governing Mergers, Acquisitions, and Tender Offers 72 Other U.S. Takeover Rules 85 Takeovers and International Securities Laws 86 U.S. State Corporation Laws and Legal Principles 96 State Antitakeover Laws 99 Regulation of Insider Trading 108 Antitrust Laws 110 Measuring Concentration and Defining Market Share 117 Example of the HH Index 118 European Competition Policy 121 Research Note: Event Studies Methodology 124 M&A Research: Event Studies 124 Chapter 4: Merger Strategy 127 Growth 127 Synergy 136 Operating Synergy 138 Diversification 146 Focus Hypothesis 151 Possible Explanation for the Diversification Discount 152 Do Diversified or Focused Firms Do Better Acquisitions? 156 Other Economic Motives 157 Hubris Hypothesis of Takeovers 168 Do Managerial Agendas Drive M&A? 171 Other Motives 176 Part II: Hostile Takeovers Chapter 5: Antitakeover Measures 183 Management Entrenchment Hypothesis versus Stockholder Interests Hypothesis 184 Rights of Targets' Boards to Resist: United States Compared to the Rest of the World 185 Preventative Antitakeover Measures 186 Poison Pills 187 Corporate Charter Amendments 199 Changing the State of Incorporation 210 Active Antitakeover Defenses 211 Information Content of Takeover Resistance 234 Chapter 6: Takeover Tactics 237 Preliminary Takeover Steps 238 Tender Offers 245 Advantages of Tender Offers over Open Market Purchases 260 Proxy Fights 267 Chapter 7: Hedge Funds as Activist Investors 279 Macroeconomic Foundations of the Growth of Activist Funds 281 Leading Activist Hedge Funds and Institutional Investors 282 Hedge Funds as Acquirers 288 Hedge Fund Activism and Firm Performance 292 Buyout Premiums: Activist Hedge Funds versus Private Equity Firms 294 Part III: Going-Private Transactions and Leveraged Buyouts Chapter 8: Leveraged Buyouts 305 Terminology 305 Historical Trends in LBOs 306 Management Buyouts 314 Conflicts of Interest in Management Buyouts 318 U.S. Courts' Position on Leveraged Buyout Conflicts 319 Financing for Leveraged Buyouts 328 Returns to Stockholders from LBOs 336 Returns to Stockholders from Divisional Buyouts 337 Empirical Research on Wealth Transfer Effects 342 Protection for Creditors 343 Intra-Industry Effects of Buyouts 344 Chapter 9: The Private Equity Market 345 History of the Private Equity and LBO Business 345 Private Equity Market 346 Computing Private Equity Internal Rates of Return 360 Characteristics of Private Equity Returns 361 Replicating Private Equity Investing 365 Board Interlocks and Likelihood of Targets to Receive Private Equity Bids 366 Secondary Market for Private Equity Investments 366 Chapter 10: High-Yield Financing and the Leveraged Loan Market 369 History of the Junk Bond Market 369 Leveraged Loan Market 380 Stapled Financing 383 Part IV: Corporate Restructuring Chapter 11: Corporate Restructuring 389 Divestitures 392 Divestiture and Spinoff Process 403 Managerial Ownership and Sell-Off Gains 408 Activists and Sell-Offs 408 Shareholder Wealth Effects of Spinoffs: U.S. versus Europe 417 Equity Carve-Outs 424 Voluntary Liquidations or Bust-Ups 430 Tracking Stocks 431 Master Limited Partnerships and Sell-Offs 433 Chapter 12: Restructuring in Bankruptcy 437 Types of Business Failure 438 Causes of Business Failure 439 Bankruptcy Trends 444 U.S. Bankruptcy Laws 448 Reorganization versus Liquidation 449 Reorganization Process 450 Benefits of the Chapter 11 Process for the Debtor 457 Prepackaged Bankruptcy 461 Workouts 465 Corporate Control and Default 470 Liquidation 471 Investing in the Securities of Distressed Companies 472 Chapter 13: Corporate Governance 477 Structure of Corporations and Their Governance 477 CEO Severance Payments 494 Managerial Compensation, Mergers, and Takeovers 494 CEO Compensation and Power 495 Golden Parachutes 499 Compensation Characteristics of Boards That are More Likely to Keep Agency Costs in Check 501 Role of the Board of Directors 502 Antitakeover Measures and Board Characteristics 512 Disciplinary Takeovers, Company Performance, CEOs, and Boards 515 Merger Strategy and Corporate Governance 516 CEO Compensation and M&A Programs 516 Do Boards Reward CEOs for Initiating Acquisitions and Mergers? 516 CEO Compensation and Diversification Strategies 517 Agency Costs and Diversification Strategies 518 Interests of Directors and M&As 519 Managerial Compensation and Firm Size 520 Corporate Control Decisions and Their Shareholder Wealth Effects 521 Does Better Corporate Governance Increase Firm Value? 522 Corporate Governance and Competition 523 Executive Compensation and Postacquisition Performance 524 Mergers of Equals and Corporate Governance 525 Chapter 14: Joint Ventures and Strategic Alliances 535 Contractual Agreements 535 Comparing Strategic Alliances and Joint Ventures with Mergers and Acquisitions 536 Joint Ventures 536 Strategic Alliances 542 Chapter 15: Valuation 551 Valuation Methods: Science or Art? 553 Managing Value as an Antitakeover Defense 553 Benchmarks of Value 554 How the Market Determines Discount Rates 566 Valuation of the Target's Equity 579 Marketability of the Stock 579 Takeovers and Control Premiums 583 Valuation of Stock-for-Stock Exchanges 588 Shareholder Wealth Effects and Methods of Payment 589 Exchange Ratio 595 Fixed Number of Shares versus Fixed Value 602 Merger Negotiations and Stock Offers: Halliburton versus Baker Hughes 603 International Takeovers and Stock-for-Stock Transactions 603 Desirable Financial Characteristics of Targets 604 Chapter 16: Tax Issues in M&A 613 Financial Accounting for M&As 614 Taxable versus Tax-Free Transactions 614 Tax Consequences of a Stock-for-Stock Exchange 617 Asset Basis Step-Up 618 Changes in the Tax Laws 619 Role of Taxes in the Merger Decision 620 Role of Taxes in the Choice of Sell-Off Method 622 Organizational Form and M&A Premiums 622 Capital Structure and Propensity to Engage in Acquisitions 623 Taxes as a Source of Value in Management Buyouts 624 Miscellaneous Tax Issues 625 Glossary 631 Index 643

Additional information

CIN1119380766G
9781119380764
1119380766
Mergers, Acquisitions, and Corporate Restructurings by Patrick A. Gaughan
Used - Good
Hardback
John Wiley & Sons Inc
20180209
672
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 good condition, but if you are not entirely satisfied please get in touch with us

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