Spinoff versus Sell-Off Decision
There are multiple options when one company decides to separate a business from the entire corporation. These may include a divestiture or sell-off, an outright sale of the unit, or a spinoff.
Companies with overvalued assets based on their intrinsic value usually sell off the business to maintain value. This is based on an analysis by Prezas and Simonyan, where...
Different Classes of Antitakeover Measures
Takeovers are pretty common in M&As. This is why in order to protect a company, there are different classes of antitakeover measures. We will discuss all of those today.
One of the most priorities in running a business is to protect your company from a takeover. This is because a lot of shareholders and competitors are always planning a takeover. They do so to...
What Are Spinoffs?
For the past few articles, we have mentioned the word “Spinoffs” several times. We discussed what it is in passing. Today, we will dive deeper into what spinoffs are, and the role they play in corporate restructuring.
What Are Spinoffs?
Spinoffs are a large part of the corporate restructuring strategy. In spinoffs, the parent company often handouts shares in the...
Round-Trip Wealth Effects
Most of the time, the market responds negatively when a corporation declares an acquisition. In a previous article, we reviewed a research that indicates a positive response when a company announces a sell-off. So, this makes one wonder: what is the net, round-trip wealth effect? In the present conversation, we will center on that and more.
In their research,...
Divestiture and Spinoff Process
Now that we all know about divestitures and what they are, let’s go over the divestiture and spinoff process step-by-step. Generally, each specific type of divestiture is unique. This means it can happen on a different schedule. However, for this one, we will look at the generalized six-step process.
Divestiture and Spin Off Process
Step 1: Settle on A...
Reasons for Voluntary Divestitures
There are many types of corporate restructuring, one of which is divestiture. A voluntary divestiture is the selling of a part of the corporation. Buyers usually pay in cash, marketable securities, or a mix of the two.
Divestiture can also be voluntary or involuntary. Involuntary divestitures occur when a firm receives a negative review by the FTC. There are times when...
Divestitures & Corporate Restructuring
Corporate expansion is usually the goal of mergers and acquisitions (M&A). However, corporations sometimes have to decrease and downgrade their operations.
This need may emerge on the grounds that a division of the organization is performing inadequately. Or basically, in light of the fact that it no longer fits into the association’s arrangements. ...
Corporate Restructuring Introduction
Now that we have finished our chapter for high-yield financing and the leveraged loan market, we can move on to corporate restructuring. Mergers and acquisitions are focused on corporate expansions almost all of the time. However, there are times when companies have to condense. And cut back their operations. It happens to a lot of businesses, even the best ones....
Junk Bond Research & Growth of the Market
We are almost done with our discussion about the history of the junk bond market. In today’s article, we will focus on the role of junk bond research when it comes to the growth of the market in the fourth wave. Let’s get to it.
There were multiple studies and research on junk bonds. These studies indicate that these securities are not as risky as some may think....
Junk Bond Refinancing and Bridge Loans
In continuation of our discussion regarding the history of the junk bond market, we will talk about the junk bond refinancing and bridge loan. We will also dive into the disintegration of the junk bond market in the latter part of the 80s. Moreover, we will go through the LTV bankruptcy, the financing decline of 1989, and more.
Junk Bond Refinancing and Bridge Loans...
Why the Junk Bond Market Grew
In the previous article, we discussed the junk bond market, what it is, and what its history was. Today, we will continue with this topic. More specifically, we will talk about why the junk bond market grew.
During the 1980s, there was a dramatic and rapid growth in the junk bond market. This growth was so significant that investors finally took notice of this...
Junk Bond Market History
Now that we have finished our discussion about the private equity market, we will talk about the High-Yield Financing and the Leveraged Loan Market. More specifically, in this article, we will talk about the history of the junk bond market.
High-yield bonds, or also known as junk bonds, are debt securities that have below investment-grade ratings. Hence, the name junk...