Relacionar Columnas M and V 3Versión en línea mergers and valuations por alex kellett 1 A 25% phase 4 APP 2 Event studies 3 3rd wave: Subprime aka 4 Gearing ratio 5 Merger success: selling company 6 Why TAPP 7 Merger cycle 3 8 White Knight 9 Merger Success: Dealmakers, bankers, advisers etc. 10 Merger Cycle 2 11 Merger phase 1 12 Revenue synergies 13 Merger phase 2 14 Merger Phase 3 15 Merger cycle 1 signature event 16 Qualitatives 17 Merger Cycle 2 signature event 18 Merger cycle 4 19 Merger cycle 3 signature event 20 MergVal 21 Merger success from the perspective of continuing major shareholders 22 Merger cycle 4 signature event 23 Merger Phase 4 24 Epstein 25 Merger Cycle 1 26 Merger Monday 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. 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. Financing more available as overall M&A vol grows. APP = 20-35% 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. Financial Times: 13.01.2014. 'The date it is safe to do mergers again'. 3 major acquisitions announced on this date. Merger boom legitimised, laggards criticised. Catch up deals. APP% quickly over 50%. 2002-08: Subprime 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) 1982-90: LBO 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) Countrywide financial acquisition RJR Nabisco Acquisition 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) 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 >%) qualitative. Only one subject: Chase/Bank one December 2011-19: Megaboom economy still perceived as in recession by many. A few 1-2 year cash paybook deals. APP 10-18% Late cycle deals often over 100% APP until: increasing failures; declining target quality + reduced merger financing cause exhaustion peak Universal Banking (Travelers/Citicorp). led to repeal of US Glass-Steagall Law. (Deregulation spurred merger activity) Commercial banks chasing IP profit and prestige. % of long term debt to total capital. The after tax cost of equity is 2-2.5 times that of debt. WACC merger evaluators who solely rely on subjective criteria evaluated on a cash flow effect basis only (as with all syn). 1996-00: Dot Com 1
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