Relacionar Columnas M and V 3Versión en línea mergers and valuations por alex kellett 1 Merger Phase 4 2 Merger cycle 3 signature event 3 Merger phase 1 4 Event studies 5 Merger Phase 3 6 White Knight 7 MergVal 8 Merger Cycle 1 9 Revenue synergies 10 3rd wave: Subprime aka 11 Merger Cycle 2 12 A 25% phase 4 APP 13 Gearing ratio 14 Merger cycle 1 signature event 15 Merger success: selling company 16 Epstein 17 Merger Cycle 2 signature event 18 Merger phase 2 19 Merger Success: Dealmakers, bankers, advisers etc. 20 Merger Monday 21 Why TAPP 22 Merger cycle 4 23 Qualitatives 24 Merger cycle 4 signature event 25 Merger success from the perspective of continuing major shareholders 26 Merger cycle 3 evaluated on a cash flow effect basis only (as with all syn). Financing more available as overall M&A vol grows. APP = 20-35% 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) Financial Times: 13.01.2014. 'The date it is safe to do mergers again'. 3 major acquisitions announced on this date. qualitative. Only one subject: Chase/Bank one economy still perceived as in recession by many. A few 1-2 year cash paybook deals. APP 10-18% 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. reflecting the synergy vs premium principles of modern best practice merger valuation (VG and IVE) 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 Facebook and LinkedIn IPOs 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. 1996-00: Dot Com 1 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%. 1982-90: LBO Universal Banking (Travelers/Citicorp). led to repeal of US Glass-Steagall Law. (Deregulation spurred merger activity) Commercial banks chasing IP profit and prestige. 2002-08: Subprime may be equiv to 3x the financial APP as the comparable %APP consummated in Phase 1 RJR Nabisco Acquisition Late cycle deals often over 100% APP until: increasing failures; declining target quality + reduced merger financing cause exhaustion peak 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 >%) % of long term debt to total capital. The after tax cost of equity is 2-2.5 times that of debt. WACC Countrywide financial acquisition December 2011-19: Megaboom Netscape and Worldnet IPOs
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