Dissenters’ rights are a set of legal protections that allow shareholders to object to and vote against a proposed merger or acquisition. These rights are typically enshrined in a company’s articles of incorporation or bylaws. Dissenters’ rights give shareholders the ability to demand appraisal of their shares, or to receive payment in cash or other … Read more
A fairness opinion is a professional opinion rendered by a financial advisor as to whether the terms of a proposed transaction are fair, from a financial point of view, to the shareholders of the company involved in the transaction. The opinion is usually given in relation to a proposed merger or acquisition, but can also … Read more
Novation is the act of replacing one party in a contract with another party. This can be done with the consent of all parties involved in the original contract, or it can be done unilaterally by one party. Novation is often used in the context of mergers and acquisitions, where one company is acquired by … Read more
A circular merger is a type of corporate merger or acquisition in which a company acquires another company that it already owns, either directly or indirectly. In a circular merger, the acquiring company typically forms a new holding company that becomes the parent company of both the acquired company and the acquiring company. The new … Read more
In business, a buyout is the purchase of one company by another. A buyout can be accomplished in several ways, but the most common is for the purchasing company to simply purchase all of the outstanding shares of the target company. This type of buyout is known as a 100% buyout. Another common type of … Read more
A reverse triangular merger is a type of corporate merger that is typically used in order to allow a private company to go public without going through an initial public offering (IPO). In a reverse triangular merger, the private company is acquired by a public company, with the public company then becoming the surviving entity. … Read more
The purchase acquisition accounting method is used when one company purchases another company. The company that is purchased is considered the acquired company, and the company that does the purchasing is considered the acquiring company. Under this method, the acquired company’s assets and liabilities are recorded at their fair market value as of the date … Read more
. Poison Pill: A Defense Strategy and Shareholder Rights Plan. Why do poison pills use preferred stock? There are a few reasons why poison pills use preferred stock. First, preferred stock generally has a higher claim on a company’s assets and earnings than common stock, so if a company were to be acquired, the preferred … Read more
A Pac-Man Defense is a type of hostile takeover defense in which the target company (the “Pac-Man”) aggressively tries to acquire the company that is trying to acquire it (the “predator”). This can be done by the Pac-Man buying up shares of the predator, or by the Pac-Man making its own hostile bid for the … Read more
When a company is bought or sold, the process is called a split-up. A split-up can also happen when a company is divided into two or more parts. Each part is then sold to different buyers. What are the disadvantages of mergers? There are a number of disadvantages to mergers, which can include the following: … Read more
