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