{"product_id":"merger-arbitrage-9781118440018","title":"Merger Arbitrage","description":"\u003cb\u003eBook Synopsis\u003c\/b\u003e\u003cbr\u003eMerger arbitrage is one of the most commonly used strategies but paradoxically one of the least known. This book describes how to implement this strategy, located at the crossroad of corporate finance and asset management, and where its risks lie through numerous topical examples.\u003cbr\u003e\u003cbr\u003e\u003cb\u003eTable of Contents\u003c\/b\u003e\u003cbr\u003e\u003cp\u003eForeword by Michael Zaoui xiii\u003c\/p\u003e \u003cp\u003eAcknowledgements xix\u003c\/p\u003e \u003cp\u003eAbout the Authors xxi\u003c\/p\u003e \u003cp\u003eIntroduction xxiii\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART I THE ARBITRAGE PROCESS 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003e1 The Role of the Market in Mergers and Acquisitions 3\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e1.1 Structural Changes to the Financial Markets 4\u003c\/p\u003e \u003cp\u003e1.2 Changes to M\u0026amp;A Practice 7\u003c\/p\u003e \u003cp\u003e1.3 Market Evaluation of M\u0026amp;A 9\u003c\/p\u003e \u003cp\u003e1.3.1 The price offered to shareholders of the target company 9\u003c\/p\u003e \u003cp\u003e1.3.2 Structure – the key to evaluating an offer 9\u003c\/p\u003e \u003cp\u003e1.4 Types of Synergies and Waves of M\u0026amp;A 11\u003c\/p\u003e \u003cp\u003e1.4.1 Justification for transactions 11\u003c\/p\u003e \u003cp\u003e1.4.1.1 Better efficiency 11\u003c\/p\u003e \u003cp\u003e1.4.1.2 Obtaining market power 12\u003c\/p\u003e \u003cp\u003e1.4.1.3 Acquiring specific resources 13\u003c\/p\u003e \u003cp\u003e1.4.1.4 Benefiting from the intellectual property of the target company 13\u003c\/p\u003e \u003cp\u003e1.4.1.5 Hindering the progress of a troublesome competitor 13\u003c\/p\u003e \u003cp\u003e1.4.1.6 Blocking new entrants to a sector 14\u003c\/p\u003e \u003cp\u003e1.4.2 Waves of M\u0026amp;A 14\u003c\/p\u003e \u003cp\u003eCase Study: The Alcan\/Pechiney Deal 18\u003c\/p\u003e \u003cp\u003e\u003cb\u003e2 The Different Types of Transactions 33\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e2.1 Types of Transactions 33\u003c\/p\u003e \u003cp\u003e2.1.1 Cash transactions 33\u003c\/p\u003e \u003cp\u003e2.1.2 All-share transactions 39\u003c\/p\u003e \u003cp\u003e2.1.3 Mixed cash-and-share transactions 46\u003c\/p\u003e \u003cp\u003e2.1.4 Collars 53\u003c\/p\u003e \u003cp\u003e2.2 The Choice of Payment Method 57\u003c\/p\u003e \u003cp\u003e\u003cb\u003e3 Risk and Return Factors 59\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e3.1 The Different Outcomes 59\u003c\/p\u003e \u003cp\u003e3.1.1 The transaction is completed 59\u003c\/p\u003e \u003cp\u003e3.1.1.1 The probability of success 59\u003c\/p\u003e \u003cp\u003e3.1.1.2 Risks of failure 60\u003c\/p\u003e \u003cp\u003e3.1.2 The transaction fails 65\u003c\/p\u003e \u003cp\u003e3.1.2.1 Estimating failure 66\u003c\/p\u003e \u003cp\u003e3.1.2.2 Estimating potential losses 66\u003c\/p\u003e \u003cp\u003e3.1.3 The transaction is completed at a price lower than the initial offer 70\u003c\/p\u003e \u003cp\u003e3.1.4 Rival bids and bidding wars 70\u003c\/p\u003e \u003cp\u003e3.2 M\u0026amp;A Timetable 73\u003c\/p\u003e \u003cp\u003e3.2.1 Timetable considerations according to offer type 73\u003c\/p\u003e \u003cp\u003e3.2.1.1 Takeovers 73\u003c\/p\u003e \u003cp\u003e3.2.1.2 The unique case of tender offers 75\u003c\/p\u003e \u003cp\u003e3.2.1.3 Mergers 76\u003c\/p\u003e \u003cp\u003e3.2.2 Sector differences 77\u003c\/p\u003e \u003cp\u003e\u003cb\u003e4 The Merger Arbitrage Strategy 81\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e4.1 The Long-Term Profitability of the Strategy 81\u003c\/p\u003e \u003cp\u003e4.2 The Factors that Influence Returns 82\u003c\/p\u003e \u003cp\u003e4.3 The Different Approaches to the Strategy Developed by Specialist Managers 85\u003c\/p\u003e \u003cp\u003e4.3.1 The deal’s risk zone 86\u003c\/p\u003e \u003cp\u003e4.3.2 The use of leverage 87\u003c\/p\u003e \u003cp\u003e4.3.3 The use of options or bonds 87\u003c\/p\u003e \u003cp\u003e4.3.4 Investment portfolio analysis 89\u003c\/p\u003e \u003cp\u003e4.3.5 Portfolio concentration 89\u003c\/p\u003e \u003cp\u003e4.3.6 The role of trading 90\u003c\/p\u003e \u003cp\u003e4.3.7 Classifications 90\u003c\/p\u003e \u003cp\u003e4.4 The Conclusions of Academic Studies 91\u003c\/p\u003e \u003cp\u003e4.4.1 Studies on the returns generated by merger arbitrage strategies 92\u003c\/p\u003e \u003cp\u003e4.4.2 The role of arbitrageurs in the execution of M\u0026amp;A transactions 94\u003c\/p\u003e \u003cp\u003e4.4.3 Other characteristics of merger arbitrage strategies 96\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART II ANALYZING THE RISK OF FAILURE 97\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003e5 Financing Risk 99\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e5.1 The Different Financing Methods 99\u003c\/p\u003e \u003cp\u003e5.1.1 Revolving credit 101\u003c\/p\u003e \u003cp\u003e5.1.2 Bridge loan 102\u003c\/p\u003e \u003cp\u003e5.1.3 Term loan 102\u003c\/p\u003e \u003cp\u003e5.1.4 Syndicated loan 105\u003c\/p\u003e \u003cp\u003e5.1.5 Mezzanine loans 106\u003c\/p\u003e \u003cp\u003e5.1.6 The bond market 107\u003c\/p\u003e \u003cp\u003e5.1.7 Contingent value rights (CVRs) 110\u003c\/p\u003e \u003cp\u003e5.2 The Legal Security of the Financing 111\u003c\/p\u003e \u003cp\u003e5.2.1 The UK legal framework 111\u003c\/p\u003e \u003cp\u003e5.2.2 The US legal framework 113\u003c\/p\u003e \u003cp\u003e5.2.3 The European legal framework in general 121\u003c\/p\u003e \u003cp\u003eCase Study: The Dow Chemical\/Rohm \u0026amp; Haas Deal 122\u003c\/p\u003e \u003cp\u003e\u003cb\u003e6 Competition Risk 129\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e6.1 Origins and Regulatory Framework of Competition Law 129\u003c\/p\u003e \u003cp\u003e6.1.1 United States 129\u003c\/p\u003e \u003cp\u003e6.1.2 Europe 132\u003c\/p\u003e \u003cp\u003e6.2 Competent Authorities and Approval Process 133\u003c\/p\u003e \u003cp\u003e6.2.1 United States 133\u003c\/p\u003e \u003cp\u003e6.2.2 Europe 137\u003c\/p\u003e \u003cp\u003e6.2.3 China 140\u003c\/p\u003e \u003cp\u003e6.3 Competition Remedies 143\u003c\/p\u003e \u003cp\u003e6.4 Country Differences in Evaluation 145\u003c\/p\u003e \u003cp\u003e6.5 The Allocation of Competition Risk between the Parties 151\u003c\/p\u003e \u003cp\u003eCase Study: The Oracle\/Sun Deal 153\u003c\/p\u003e \u003cp\u003e\u003cb\u003e7 Legal Aspects of Merger Agreements 159\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e7.1 The Different Documents 159\u003c\/p\u003e \u003cp\u003e7.2 Structure of a Merger Agreement 161\u003c\/p\u003e \u003cp\u003e7.3 MAC Clauses 162\u003c\/p\u003e \u003cp\u003e7.3.1 A negative definition of the MAC clause 164\u003c\/p\u003e \u003cp\u003e7.3.2 MAC clauses and court decisions 165\u003c\/p\u003e \u003cp\u003e7.3.3 MAC clauses and private-equity transactions 167\u003c\/p\u003e \u003cp\u003e7.3.4 Why these clauses? 168\u003c\/p\u003e \u003cp\u003e7.4 Other Legal Clauses 171\u003c\/p\u003e \u003cp\u003e7.4.1 Go-shop clause 171\u003c\/p\u003e \u003cp\u003e7.4.2 Break-up-fee clause 175\u003c\/p\u003e \u003cp\u003e7.4.3 Matching-rights clause 176\u003c\/p\u003e \u003cp\u003e7.4.4 Specific-performance clause 178\u003c\/p\u003e \u003cp\u003e7.4.5 Dissenters’-rights clause 180\u003c\/p\u003e \u003cp\u003e\u003cb\u003e8 Other Risks 183\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e8.1 Administrative Authorizations 183\u003c\/p\u003e \u003cp\u003e8.1.1 United States 183\u003c\/p\u003e \u003cp\u003e8.1.1.1 The role of the CFIUS 183\u003c\/p\u003e \u003cp\u003e8.1.1.2 Sector authorities 185\u003c\/p\u003e \u003cp\u003e8.1.1.3 PSCs 187\u003c\/p\u003e \u003cp\u003e8.1.2 Canada 187\u003c\/p\u003e \u003cp\u003e8.1.3 Europe 190\u003c\/p\u003e \u003cp\u003e8.2 Political Risk 190\u003c\/p\u003e \u003cp\u003e8.3 Natural-Disaster Risk 193\u003c\/p\u003e \u003cp\u003e8.4 The Risk of Fraud or False Accounting 195\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART III SPECIFIC TRANSACTIONS 197\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003e9 Hostile Transactions 199\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e9.1 A General Overview of Hostile Transactions 199\u003c\/p\u003e \u003cp\u003e9.1.1 Profile of the target company 200\u003c\/p\u003e \u003cp\u003e9.1.2 The different parties involved in hostile offers 201\u003c\/p\u003e \u003cp\u003e9.1.2.1 The buyer 201\u003c\/p\u003e \u003cp\u003e9.1.2.2 The target company and its constituent parts 201\u003c\/p\u003e \u003cp\u003e9.1.2.3 Other potential buyers 202\u003c\/p\u003e \u003cp\u003e9.1.2.4 Arbitrageurs 203\u003c\/p\u003e \u003cp\u003e9.1.3 The offer strategies 203\u003c\/p\u003e \u003cp\u003e9.1.3.1 Direct purchase on the market 203\u003c\/p\u003e \u003cp\u003e9.1.3.2 Tender offer 204\u003c\/p\u003e \u003cp\u003e9.1.3.3 Directly approaching the board of directors 204\u003c\/p\u003e \u003cp\u003e9.1.3.4 Proxy contest 205\u003c\/p\u003e \u003cp\u003e9.1.3.5 Legal battle 205\u003c\/p\u003e \u003cp\u003e9.1.4 The matter of price 206\u003c\/p\u003e \u003cp\u003e9.2 Regulatory Frameworks for Hostile Offers and How They Differ in Different Countries 208\u003c\/p\u003e \u003cp\u003e9.3 Defense Mechanisms 211\u003c\/p\u003e \u003cp\u003e9.3.1 Preventive measures 211\u003c\/p\u003e \u003cp\u003e9.3.1.1 Staggered vs unstaggered boards 211\u003c\/p\u003e \u003cp\u003e9.3.1.2 Fair-price provision 212\u003c\/p\u003e \u003cp\u003e9.3.1.3 Supermajority provision 213\u003c\/p\u003e \u003cp\u003e9.3.1.4 Dual-class recapitalization 213\u003c\/p\u003e \u003cp\u003e9.3.1.5 Golden parachutes 213\u003c\/p\u003e \u003cp\u003e9.3.1.6 Employee stock ownership plans 214\u003c\/p\u003e \u003cp\u003e9.3.1.7 Poison pill 214\u003c\/p\u003e \u003cp\u003e9.3.2 Mechanisms adopted during an offer 215\u003c\/p\u003e \u003cp\u003e9.3.2.1 The crown jewel defense 215\u003c\/p\u003e \u003cp\u003e9.3.2.2 Litigation 216\u003c\/p\u003e \u003cp\u003e9.3.2.3 Just say no 217\u003c\/p\u003e \u003cp\u003e9.3.2.4 Countertender offer: Pac-Man 218\u003c\/p\u003e \u003cp\u003e9.3.2.5 Asset restructuring 219\u003c\/p\u003e \u003cp\u003e9.3.2.6 White knight and white squire 219\u003c\/p\u003e \u003cp\u003e9.3.2.7 Going-private transaction\/LBO 220\u003c\/p\u003e \u003cp\u003e9.3.2.8 Greenmailing 220\u003c\/p\u003e \u003cp\u003e9.4 Regulatory Differences in Different Countries 220\u003c\/p\u003e \u003cp\u003e9.4.1 The UK 221\u003c\/p\u003e \u003cp\u003e9.4.2 Continental Europe 223\u003c\/p\u003e \u003cp\u003eCase Study: The Sanofi\/Genzyme Deal 229\u003c\/p\u003e \u003cp\u003e\u003cb\u003e10 Leveraged Buyouts 239\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e10.1 Main Characteristics of LBOs 239\u003c\/p\u003e \u003cp\u003e10.1.1 Principles 239\u003c\/p\u003e \u003cp\u003e10.1.2 The different parties 242\u003c\/p\u003e \u003cp\u003e10.1.2.1 The target company 242\u003c\/p\u003e \u003cp\u003e10.1.2.2 The investment funds 242\u003c\/p\u003e \u003cp\u003e10.1.2.3 The banks 244\u003c\/p\u003e \u003cp\u003e10.1.2.4 The management 244\u003c\/p\u003e \u003cp\u003e10.1.3 Exit opportunities 245\u003c\/p\u003e \u003cp\u003e10.2 A Brief History of Private Equity 245\u003c\/p\u003e \u003cp\u003e10.2.1 Emergence and growth of private equity 246\u003c\/p\u003e \u003cp\u003e10.2.2 The explosion of private equity 247\u003c\/p\u003e \u003cp\u003e10.3 How LBOs Affect Arbitrage 248\u003c\/p\u003e \u003cp\u003e10.3.1 The reasons for the transaction 248\u003c\/p\u003e \u003cp\u003e10.3.2 Financing 249\u003c\/p\u003e \u003cp\u003e10.3.3 Competition risk 249\u003c\/p\u003e \u003cp\u003e10.3.4 Agreement terminology and the use of reverse termination fees 250\u003c\/p\u003e \u003cp\u003e10.3.5 Management and a potential conflict of interests 250\u003c\/p\u003e \u003cp\u003eCase Study: LBO as an Arbitrage Opportunity: Del Monte Foods 251\u003c\/p\u003e \u003cp\u003eConclusion 257\u003c\/p\u003e \u003cp\u003eGlossary 259\u003c\/p\u003e \u003cp\u003eReferences 265\u003c\/p\u003e \u003cp\u003eIndex 271\u003c\/p\u003e","brand":"John Wiley \u0026 Sons Inc","offers":[{"title":"Default Title","offer_id":49406870258007,"sku":"9781118440018","price":68.4,"currency_code":"GBP","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0817\/1739\/5799\/files\/9781118440018.jpg?v=1730497395","url":"https:\/\/bookcurl.com\/products\/merger-arbitrage-9781118440018","provider":"Book Curl","version":"1.0","type":"link"}