There have been six merger waves in the historical mergers. Yong Rin (2011) contends that the first four merger waves were centered in the U.S. while the fifth and the sixth involved Europe and Asia. These six merger waves shared common features that they all occurred in cyclical patterns and ended with a stock market crash. What follows is the detail of each merger wave. First wave – 1897 to 1904 The first merger wave took place after the depression of 1883‚ peaked in 1899 and lasted until 1904
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VALUATION -PROBLEM SOLVING FOR THE CASE STUDY Name Institution Instructor Course Date Question 1 Potential value creation in the transitions: 1. Use of a risk hedging financial contract‚ the swap. 2. Acquisition of an undervalued target. 3. Evading tax liability. The management under the advisory of analyst believe that the company requires to make intensive‚ heavy investments which is not feasible if the Seagate Inc. remains a public company The other capital reorganisations alternatives are
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Mergers and Other Forms of Corporate Restructuring Mergers and Other Forms of Corporate Restructuring Sources of Value Strategic Acquisitions Involving Common Stock Acquisitions and Capital Budgeting Closing the Deal Mergers and Other Forms of Corporate Restructuring Takeovers‚ Tender Offers‚ and Defenses Strategic Alliances Divestiture Leveraged Buyouts What is Corporate Restructuring? Any change in a company’s: 1. Capital structure‚ 2. Operations‚ or 3. Ownership
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Corporate restructuring and the LBO CHAPTER 3: CONTRACTIONS Contraction is the reduction in the size of the private company or business due to corporate restructuring. 3.1 Spin-Offs—A spin-off transaction is when a parent company separates the shares of its subsidiary from the original private company shares and distributes those shares‚ on a pro-rata basis to its shareholders. In essence‚ two separate entities are formed in which the stockholders are issued the shares in the legal
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Business 9203 Section 2 MANAGING FINANCIAL RESOURCES QUIZ June 2011 STUDENT NUMBER _____________________________ You have a maximum of 80 minutes for the quiz. Please provide your answers on this paper in the spaces provided and hand in your paper at the end of the quiz. Only short precise answers are required and you can use point form. The weight given to each question is indicated at the end of the question. The total possible marks are 70. The quiz is open book and you may feel
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ADVISING IN MERGERS‚ ACQUISITIONS‚ AND FINANCIAL RESTRUCTURING ADVISING Investment banks are active in mergers and acquisitions (M&A)‚ leveraged buyouts (LBOs)‚ restructuring and recapitalization of companies‚ and reorganization of bankrupt and troubled companies. They do so in one or more of the following ways: (1) identifying candidates for a merger or acquisition‚ M&A candidates; (2) advising the board of directors of acquiring companies or target companies regarding price and non-price terms
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searching for new financing and‚ ultimately‚ meeting Halpern. Halpern had never done business in continental Europe before‚ but understood that doing business in Italy would be much different than in the U.S.‚ especially since this was the largest LBO ever in Italy. Halpern and his associates had to carefully structure a complex deal to satisfy cultural sensitivities‚ perform intense and expensive due diligence‚ structure finance based on Italy’s high-yield market‚ and take into consideration the
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Connections- will use leveraged buyout (LBO) model‚ which means the company will finance the acquisition through bank loan or some other borrowing methods. Hence‚ the debt-to-equity ratio will change in time. Since we will need to estimate the discount rate any time the capital structure changes‚ neither WACC nor APV would be reliable alone. Therefore‚ Ms. Zhang should use the combination of WACC and APV methods. As stated above‚ ACC will use the Leverage buy out (LBO) approach‚ which means that the debt
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shareholder value worldview (129). Through different players‚ mechanisms and worldviews‚ the Takeover Movement was a revolutionary shift towards the importance of shareholder value. One important technique that was popularized by investment bankers was the “LBO” or leveraged buyout‚ where people would provide large investment funds which they used to take over companies by buying up their stock (139). Leveraged buyouts were supposed to help Wall Street institutions by being a “healthy change” for the market:
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Chapter 2 -CAPM: how risk affects return -Expected Return (on investment): mean value of its probability distribution of returns; greater the probability return will be below expected‚ greater the stand-alone risk -Risk Averse: he/she must be compensated for holding risky assets -Asset has 2 risk types: Diversifiable risk can be eliminated by diversification; market risk cannot be eliminated -Market risk measured by standard deviation of returns on portfolio consisting of all stocks -Relevant
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