INSEAD Library

Includes bibliographical references and index

Digitized

Corporate Acquisitions and Mergers A Practical Guide to the Legal, Financial and Administrative Implications Contents Foreword xi Chapter 1 Introduction 1.1 Chapter 2 The Regulatory Framework 2.1 Chapter 3 Identifying and Valuing the Business Finding a Suitable Candidate Evaluating the Business Starting Negotiations 3.1 3.1 3.3 3.8 Chapter 4 The Structure of the Transaction 4.1 Methods of Acquiring Shares 4.1 Private Acquisition Agreement 4. 1 Public Offer or Takeover Bid" 4.1 Merger by Agreement 4.2 Merger by Scheme of Arrangement 4.3 The Implications of Different Levels of Investment 4.5 Shares or Assets? 4.7 Specific Implications of Business Transfers 4.9 Chapter 5 Potential Risks and Liabilities Assessing the Hidden Costs Methods of Guarding Against Potential Liabilities 5.1 5.1 5.7 Accountants' Reports Warranties and Indemnities Insurance Considerations 5.8 5.12 5.14 Chapter 6 Paying for the Acquisition The Form of the Consideration Shares Loan Stock Convertible Loan Stocks Warrants Cash Private Negotiations with Individual Vendors Using the target company's resources to finance the acquisition The timing of payment 6.1 6.1 6.2 6.7 6.11 6.12 6.13 6.13 6.17 6.19 Chapter 7 Shareholders' Agreements Control Structure Establishment Minority Protection Financial Matters Transfer of Shares Restrictions on Competition 7.1 7.2 7.2 7.4 7.5 7.6 7.7 7.8 Chapter 8 Merger Control and the Anti-Trust Laws UK Merger Control The Fair Trading Act 1973 Regulated Industries in the UK The Industry Act 1975 EEC Anti-Trust Laws The Draft Merger Control Regulations Article 86 and Merger Control Article 85 US Anti-Trust Laws UK Anti-Trust Laws The Restrictive Trade Practices Act 1976 The Competition Act 1980 8.1 8.1 8.1 8.10 8.11 8.12 8.12 8.13 8.14 8.18 8.20 8.20 8.24 Chapter 9 Rules Imposed by the City's "Self-regulatory" Authorities The Stock Exchange Class 1 Class 2 Class 3 Class 4 Reverse takeovers Concessions made to USM companies Circulars to shareholders The Stock Exchange and Oiler documents The Panel on Takeovers and Mergers The City Code The SARs NASDIM Statutory Authority The Licensed Dealers Rules General Permission No. 3 Summary 9.1 9.2 9.4 9.5 9.6 9.6 9.8 9.8 9.9 9.19 9.14 9.16 9.23 9.26 9.28 9.29 9.30 9.32 Chapter 10 Market Dealings Dealings before the Offer Period Dealings during the Offer Period Dealings following the Offer Period 10.1 10.2 10.8 10.12 Chapter 11 Employment Implications Management Continuation of existing management Removal of existing management Redundancy Costs and Closure Consultation requirements The impact of the Vredeling proposals The Transfer of Employees On a sale of shares On a sale of a business Transfer of Pension Entitlements The Human Factors 11.1 11.1 11.1 11.2 11.4 11.7 11.8 11.10 11.10 11.11 11.14 11.20 Chapter 12 Tax Planning The Cold New Climate for Tax Planning Tax Planning on the Sale of a Business The Vendor's tax position The Purchaser's tax position Apportionment of consideration Avoiding corporation tax on capital gains Value Added Tax Tax Planning on a Sale of Shares The Vendor's tax position The Purchaser's tax position Group relief Disallowance of trading losses Utilising capital losses Group roll-over relief Latent capital gains liabilities Surrender of surplus ACT "Group income" and dividend payments Stamp Duty Sale of shares Sale ola business Capital Duty 12.1 12.1 12.4 12.4 12.6 12.8 12.9 12.10 12.11 19.11 12.13 12.14 19.16 12.17 12.18 12.18 12.19 12.20 12.21 12.21 12.24 12.26 Chapter 13 Accounting for Acquisitions and Mergers Consolidation of subsidiaries "Equity accounting" for associated companies The "cost" method Acquisition Accounting Merger Accounting The present legal position The New Accounting Standard 13.1 13.1 13.2 13.2 13.3 13.4 13.6 13.7 Chapter 14 Current Trends in Acquisition Activity Management Buy-Outs "Demergers" Investing through the "Business Expansion Scheme" Acquisitions by Companies of their own Shares Acquisitions from Receivers 14.1 14.1 14.7 14.11 14.15 14.19 Chapter 15 The Shape of Things to Come The Wilson Committee The second tier markets Institutional power The Stock Exchange system Integration of financial services The Gower Report The Financial Services Bill The future of the Panel Legislative indigestion 15.1 15.1 15.2 15.3 15.5 15.7 15.9 15.11 15.12 15.13 Appendices 1. Outline procedure on acquisition of a private company 2. Content of private acquisition agreements 3. Outline procedure on acquisition of a listed public company (including a summarised timetable) 4. Content of public offer documents 5. Circulars to Shareholders 6. Listing Particulars 7. Abbreviated Text of the City Code and SARs 8. Information sought by the Office of Fair Trading in assessing mergers Index