Relacionar Columnas M and V 3Versión en línea mergers and valuations por alex kellett 1 Event studies 2 Merger Cycle 2 signature event 3 Qualitatives 4 Revenue synergies 5 Merger success from the perspective of continuing major shareholders 6 3rd wave: Subprime aka 7 Merger Cycle 1 8 Merger cycle 1 signature event 9 Merger phase 1 10 Epstein 11 White Knight 12 Why TAPP 13 Merger cycle 4 14 Merger Success: Dealmakers, bankers, advisers etc. 15 Merger Phase 3 16 Merger Phase 4 17 Merger success: selling company 18 MergVal 19 Merger cycle 3 20 Merger phase 2 21 Merger cycle 3 signature event 22 Merger cycle 4 signature event 23 Merger Monday 24 Merger Cycle 2 25 A 25% phase 4 APP 26 Gearing ratio Netscape and Worldnet IPOs CF and synergies remain constant/increase very gradually during an M&A cycle but share price may triple. It better illustrates the importance of anticipatory purchase premium on APP (financial >%) may be equiv to 3x the financial APP as the comparable %APP consummated in Phase 1 reflecting the synergy vs premium principles of modern best practice merger valuation (VG and IVE) evaluated on a cash flow effect basis only (as with all syn). 1996-00: Dot Com 1 5 year min ownership position. reflects primacy of the party putting up risk capital: RMT: a) returns vs cost of capital. b) The deficit (APP) vs the pv of conservatively and independently determined NRS. RJR Nabisco Acquisition 2002-08: Subprime Late cycle deals often over 100% APP until: increasing failures; declining target quality + reduced merger financing cause exhaustion peak Financial Times: 13.01.2014. 'The date it is safe to do mergers again'. 3 major acquisitions announced on this date. Sellers seek to maximise the pv of cash equivalent returns over the period at which the board deems the company eligible to entertain offers (eg 6 months). (AMS: bidders + rounds) narrow self-interest. close as many deals as possible (deal flow and financial volume). No fee unless deals close; only min legal and no financial liability for value-destructive merger advice. Financing more available as overall M&A vol grows. APP = 20-35% economy still perceived as in recession by many. A few 1-2 year cash paybook deals. APP 10-18% typically allows subsidiary company to run their own operations (preserves subsidiary structure). They agree to limit their role to providing financing and developmental support as needed. (15% conglom discount) merger evaluators who solely rely on subjective criteria Universal Banking (Travelers/Citicorp). led to repeal of US Glass-Steagall Law. (Deregulation spurred merger activity) Commercial banks chasing IP profit and prestige. Countrywide financial acquisition qualitative. Only one subject: Chase/Bank one December 2011-19: Megaboom Share prices of target are always expected to increase following a serious bidder's EOI. This usually corresponds to a near-exact matching decline in the share price of acquirer (pay control premium) RMT. Merger boom legitimised, laggards criticised. Catch up deals. APP% quickly over 50%. % of long term debt to total capital. The after tax cost of equity is 2-2.5 times that of debt. WACC 1982-90: LBO Facebook and LinkedIn IPOs
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