Antitrust Laws & Filing Requirements
In a previous article, we discussed the different Antitrust Laws, how they came to effect, and their purposes. In today’s article, we will continue with the discussion of the Antitrust Laws and the filing requirements. Check them out below.
Size Requirements for Filing
The law has established size thresholds for filing because there are instances where small mergers...
Antitrust Laws
Antitrust legislation limits the ability to merge with or acquire companies. There are many antitrust laws that help maintain competition in the form of mergers. The intervention of the government on antitrust grounds makes firms not even try to attempt mergers. Other mergers are stopped when it becomes apparent that the government will likely oppose the merger.
Since...
Components of Second-Generation Laws
Second-generation rights are also known as social and economic rights. These laws incorporated provisions on the following:
Fair priceBusiness combinationControl shareCash-out statute
Fair Price Provision
This provision aims to discourage hostile takeovers. A successful tender offer lets shareholders receive the same price whether or not they have accepted the...
Special Purchase Acquisition Vehicles
Companies that raise capital in an IPO are called special purchase acquisition vehicles or SPACs. Other terms for it include blank-check companies and cash-shells. In this very different type of IPO, funds are reserved for acquisitions. Unlike others, this does not raise capital to grow a company and create liquidity for the closely held shares.
SPACs are like private...
Financing for Leveraged Buyouts
Secured and unsecured debt, often used together, are the two types of debt utilized in LBOs. The former is sometimes called asset-based lending. It contains two more types, the senior debt, and the intermediate-term debt.
These two are often considered as one in smaller buyouts. On the other hand, larger deals have multiple layers of secured debt. Depend on the...
Conflicts of Interest in Management Buyouts
Management buyouts can encounter a clear conflict of interest. Running the corporation is the manager’s responsibility. This is to maximize the value of stockholders’ investment and provide them with the highest return possible. They also take on a very different role when they have to offer stockholders to purchase something. When RJR Nabisco presented an offer to...
Globalization of LBOs
The leveraged buyout (LBO), or the use of debt to purchase the stock of a corporation has been popular for decades now. In the United States, the value and number of LBOs peaked between 2006 and 2007. After that declined, and then significantly rose again in the following years.
Although there were very few LBOs in Europe in the 1980s, the volume of these deals...
Historical Trends in LBOS
Leveraged buyout, a term for a financing technique where a company goes private, has been around since the early ’80s. Despite this, the activity itself has been done for a longer period. Such as in 1919, when the Ford Motor company wanted to be free from public regulations. This is true in terms of manufacturing and selling their Model Ts. It is also significant to note...
Hedge Funds Activism and Firm Performance
Hedge funds Activists want to obtain great returns through their agitation. In order to get the company to make meaningful changes that will uplift their stock price. Instead of aiming to take over a company in which they assume an equity position.
Hedge Fund Study
One study by Brav, et al. noticed that the performance of the companies improved after being...
Hedge Funds as Acquirers
Takeovers, which used to be the exclusive fund territory of private equity funds, have been eyed by businesses. Ever since hedge funds began feeling pressure from competitors to generate high returns. Some examples include Edward Lampert’s takeover of Kmart in January 2000. Nelson Peltz’s acquisition of Wendy’s in 2008 and merged it with Arby. In 2011, they sold Arby’s to...
Leading Activist Hedge Funds and Institutional Investors
Some of the major activist hedge funds who have been in the “activist business” for a long time. Now include Carl Icahn, David Einhorn, and Bill Ackman, as well as Nelson Peltz who are often seen in the media. Other entrants in the business include David Einhorn, Ralph Whitworth, Barry Rosenstein, Jeffrey Ubben, and Jeffrey Smith
CalPERS and CalSTRS
Activist...
Hedge Funds as Activist Investor
Over the past few weeks, we have discussed a multitude of topics regarding mergers and acquisitions. From tender offers, long-term mergers, structuring deals, anti-takeover measures, we have covered a lot. This article about Hedge Funds as Activist Investors opens up a whole new spectrum of topics we can discuss. This is an introduction to Hedge Funds as Activist...