Minority shareholder treatment surrounding the Dell MBO

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Timothy A. Kruse
Keyword(s):  
Mergers And Acquisitions ◽  
Corporate Finance ◽  
Design Methodology ◽  
Minority Shareholder ◽  
Negotiation Process ◽  
Content Type ◽  
Going Private ◽  
Vice Chancellor ◽  
Rights Issues ◽  
Silver Lake

PurposeThis paper is a clinical examination of the October 2013 Management Buyout of Dell Inc. by founder Michael Dell and Silver Lake Partners for a total consideration of $13.88 per share. The proposed transaction was targeted by shareholders unhappy with the deal price and voting framework. Various shareholders went on to file an appraisal suit. Examining these events yields insights into shareholder rights issues in a major transaction.Design/methodology/approachThe paper examines events surrounding the acquisition including the negotiation process, go-shop period, shareholder activist demands for a higher price, shareholder voting and the subsequent appraisal trial and appeal.FindingsDespite suggesting Dell's board fulfilled its fiduciary duties, Delaware Vice Chancellor Travis Laster awarded petitioning shareholders $17.62 per share, a 27% premium to the final deal consideration. This article draws on Laster's decision and research examining topics raised by the surrounding events to argue minority shareholder interests were not sufficiently protected.Research limitations/implicationsThe Dell transaction represents only one data point. Moreover, Vice Chancellor Laster's decision was reversed on appeal.Originality/valueNevertheless, the paper discusses the nuances surrounding many issues of interest to practitioners involving large going private transactions. It could also be used to illustrate many “real world” perspectives in an advanced corporate finance or mergers and acquisitions class.

How sell side advisors can reduce litigation risk in light of Delaware’s Rural/Metro decision

2014 ◽  
Vol 15 (2) ◽  
pp. 39-42 ◽  
Author(s):  
Gregory Gooding ◽  
William Regner ◽  
Maeve O'Connor ◽  
Gary Kubek
Keyword(s):  
Mergers And Acquisitions ◽  
Design Methodology ◽  
Fiduciary Duty ◽  
Financial Advisors ◽  
Litigation Risk ◽  
Content Type ◽  
Vice Chancellor ◽  
Court Of Chancery ◽  
Process Failures ◽  
Practical Implications

Purpose – To explain the implications of a March 2014 Delaware Court of Chancery decision that found RBC Capital Markets liable for damages for aiding and abetting breaches of fiduciary duty by the directors of Rural/Metro Corporation in connection with the company’s 2011 sale to an affiliate of Warburg PIncus. Design/methodology/approach – Explains the court’s findings and decision, offers procedural lessons for sell-side financial advisors, and recommends what sell-side advisors can do to limit exposure to aiding and abetting claims. Findings – The Rural/Metro decision opens the door to additional litigation risk for sell-side advisors. However, Vice Chancellor Laster’s opinion also provides a roadmap for how an advisor can limit that risk. Practical implications – Director and financial advisor liability most often results from process failures. Originality/value – Practical guidance from experienced mergers and acquisitions and securities and corporate governance lawyers.

The link between mergers and acquisitions and innovation

2018 ◽  
Vol 41 (6) ◽  
pp. 716-752 ◽  
Author(s):  
Luca Dezi ◽  
Enrico Battisti ◽  
Alberto Ferraris ◽  
Armando Papa
Keyword(s):  
Literature Review ◽  
Mergers And Acquisitions ◽  
Corporate Finance ◽  
Open Innovation ◽  
Design Methodology ◽  
Content Type ◽  
Future Studies ◽  
Current Scenario ◽  
Innovation Approach ◽  
The Relationship

Purpose The link between mergers and acquisitions (M&A) and innovation has been analysed in both corporate finance studies and the innovation literature. Despite this attention and the practical evidence that highlights different connections between these two terms, there is a need to investigate the latest trends with regard to these important topics, and to put a particular focus on the emerging paradigm of open innovation. Thus, this paper aims to provide a systematic literature review (SLR) about the relationship between M&As and the concept of innovation in the current scenario. Design/methodology/approach Through an SLR from 2012 to June 2017, 55 papers have been identified and analysed to give a better understanding of the motivations and the methodologies adopted in past studies. Findings This paper identifies various conceptual and research methodological characteristics of studies that have connected, directly or indirectly, M&As and innovation in recent years. In addition, the results highlight a scarcity of studies that explicitly or implicitly refer to the open innovation paradigm, marking only a partial understanding of this emerging phenomenon. Originality/value This paper improves the knowledge on the link between extraordinary corporate transactions and innovation, and it highlights that a clear consensus, particularly regarding the open innovation paradigm, is lacking. Thus the authors propose that future studies should carefully evaluate M&As by following the open innovation approach.

SEC permits all issuers to submit confidential draft registration statements

2017 ◽  
Vol 18 (4) ◽  
pp. 16-21
Author(s):  
Andrew Brady ◽  
Brian Breheny ◽  
Michelle Gasaway ◽  
Stacy Kanter ◽  
Michael Zeidel ◽  
...  
Keyword(s):  
Corporate Finance ◽  
Design Methodology ◽  
Review Process ◽  
Going Public ◽  
Content Type ◽  
Submission Process ◽  
The Us ◽  
Practical Guidance ◽  
Jobs Act ◽  
A Company

Purpose To explain the US Securities and Exchange Commission’s (SEC’s) June 29, 2017 announcement (as updated August 17, 2017) that the staff of its Division of Corporation Finance will accept draft registration statement submissions from all companies for nonpublic review, thereby expanding a popular benefit previously available only to emerging growth companies (ECGs) under the JOBS Act and, in limited circumstances, to certain foreign private issuers under historical Staff practices. Design/methodology/approach Explains the rationale and limitations of the new policy, the existing confidential submission process, the expanded class of issuers and transactions that now qualifies for the nonpublic review process, and content and staff processing details. Findings Recognizing that the confidential submission process for EGCs proved highly popular and quickly became standard practice for eligible companies seeking to conduct an IPO, the SEC has made the nonpublic review process available to an expanded class of issuers and transactions. The expanded confidential submission process for IPOs addresses some of the typical concerns associated with engaging in the IPO process by giving a company more time and flexibility to determine whether it actually will be able to achieve the benefits of going public before it incurs the burdens and expenses of doing so. Originality/value Practical guidance from experienced securities and corporate finance lawyers.

Factors affecting desire to negotiate again

2017 ◽  
Vol 32 (1) ◽  
pp. 16-29 ◽  
Author(s):  
Denise Fleck ◽  
Roger Volkema ◽  
Sergio Pereira ◽  
Lara Vaccari
Keyword(s):  
Outcome Measures ◽  
Design Methodology ◽  
Negotiation Process ◽  
Content Type ◽  
Factors Affecting ◽  
Negatively Associated ◽  
Process And Outcome ◽  
The Mean ◽  
Personality Process ◽  
E Mail

Purpose The purpose of this paper is to investigate the effects of negotiation process and outcome on an individual’s desire to negotiate again with the same counterpart. Design/methodology/approach Data were collected from 115 dyads representing two companies negotiating an eight-issue property leasing agreement via e-mail. Desire to negotiate again was regressed on demographic/personality, process, and outcome measures. Findings Reaching an agreement was found to be significantly related to desire to negotiate again, while the number of messages exchanged and the mean number of competitive tactics employed were positively and negatively associated with reaching an agreement, respectively. Further, perceived honesty of self and counterpart were also associated with an individual’s desire to negotiate again. Originality/value This study focuses on an aspect of real negotiations often overlooked by researchers – the likelihood of future encounters with the same party – and examines three categories of factors that could affect a party’s desire to negotiate with a counterpart again – demographic/personality, process, and outcome (actual and perceived).

scholarly journals Do mergers and acquisitions affect information asymmetry in the banking sector?

2020 ◽  
Vol 46 (12) ◽  
pp. 1521-1547
Author(s):  
John S. Howe ◽  
Thibaut G. Morillon
Keyword(s):  
Mergers And Acquisitions ◽  
Information Asymmetry ◽  
Design Methodology ◽  
Banking Sector ◽  
Policy Makers ◽  
Content Type ◽  
Deal Completion ◽  
Asymmetry Measures ◽  
The Impact

PurposeThis paper aims to investigate the consequences of mergers and acquisitions (M&As) on information asymmetry in the banking sector. Specifically, the authors look at whether specific firm or deal characteristic influence information asymmetry levels between insiders and investors, as well as the impact of recent regulation such as the Dodd–Frank Act.Design/methodology/approachThe authors decompose the M&A process into three periods (pre-announcement, negotiation and post-completion period) and document changes in the information asymmetry levels between insiders and investors through the M&A process. The authors capture changes in information asymmetry using six different spread-based information asymmetry measures.FindingsThe authors find evidence that information asymmetry increases following M&A announcement and decreases following deal completion. These findings are more pronounced for acquisitions involving a private target, all-cash deals and for mergers, as opposed to acquisition of assets. We find that overall, successful mergers improve the quality of the information environment, while failed deals degrade it. Additionally, the enactment of Dodd–Frank reduced the magnitude of the changes in information asymmetry during the M&A process. The results are important to regulators, policy makers and investors.Originality/valueTo authors’ knowledge, this is the first study that looks at the effect of bank M&As on information asymmetry as well as the effect of regulations on information asymmetry.

Segmentally aware: know when to merge and when to purge

2019 ◽  
Vol 33 (1) ◽  
pp. 196-214
Author(s):  
Yao Ma ◽  
Jiahua Xu
Keyword(s):  
Mergers And Acquisitions ◽  
Financial Performance ◽  
Design Methodology ◽  
Content Type ◽  
Structural Integration ◽  
Target Company ◽  
Overall Performance ◽  
Post Merger Integration ◽  
Merger Integration ◽  
Integration Levels

Purpose The purpose of this paper is to hone in on the degree of segment-level integration relative to corporate post-merger performance. Design/methodology/approach The sample consists of 89 segments in 29 combined companies resulting from large mergers and acquisitions (M&A) transactions between 2001 and 2014 in the pharmaceutical and chemical industries worldwide. The authors track the change through M&A in performance of segments with different integration forms as well as performance of entire companies with different integration levels. Findings The authors find that integrating the segments from the target significantly improves the acquirer’s overall performance, as well as the concerned segments’ performance, following an M&A transaction. Whereas the segments from the target company, when left unintegrated, not only exhibit subpar performance among all the segments, but also appear responsible for the worsening corporate performance. Various possible reasons for this contrast are discussed. Originality/value This paper raises awareness of the significance of segment-level analyses, and contributes to the post-merger integration (PMI) research by examining the influence of structural integration on operating segments. To the best of our knowledge, this paper is the first to investigate integration forms and the post-merger financial performance of various segments within companies.

The core potential of mergers and acquisitions to boost profits and research and development innovation

2018 ◽  
Vol 34 (11) ◽  
pp. 14-16
Keyword(s):  
Mergers And Acquisitions ◽  
Knowledge Creation ◽  
Design Methodology ◽  
Reading Time ◽  
Acquisition Time ◽  
Content Type ◽  
The Core ◽  
Pertinent Information ◽  
Time Frames ◽  
Practical Implications

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings This research paper concentrates on how M&As deliver increased profits and R&D intensity across varying post-acquisition time frames. The human mechanics beneath these achievements reveal that savvy knowledge creation and integration is crucial for extracting lasting value from an M&A. Originality/value The briefing saves busy executives, strategists and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Mergers and acquisitions in the hightech industry: a literature review

2013 ◽  
Vol 21 (1) ◽  
pp. 66-82 ◽  
Author(s):  
Matteo Rossi ◽  
Shlomo Yedidia Tarba ◽  
Amos Raviv
Keyword(s):  
Literature Review ◽  
Mergers And Acquisitions ◽  
Value Creation ◽  
Design Methodology ◽  
Business Development ◽  
Critical Examination ◽  
High Tech ◽  
Review Of Literature ◽  
Content Type ◽  
Start Ups

PurposeAs a result of the impressive wave of mergers and acquisitions (M&As) in recent years, operations that were traditionally considered to be extraordinary have become common business development options. M&As have produced mixed results for their stakeholders, which resulted in extensive economics debate, albeit without a systemic vision. As a result, the M&A literature has not yet developed a paradigm and the purpose of this paper is to present a review of the existing literature.Design/methodology/approachThe authors carried out a review of literature on M&As in technology‐driven sectors.FindingsThe critical examination of the innovation and value creation processes in M&As in hightech industry provides new insights for incumbent executives and can better plan and implement M&As deals.Originality/valueSince 1990 there has been a major expansion of M&As in high‐tech sectors, many involving the acquisition of small and young start‐ups. To address this important topic the authors present here a review of literature on M&As in technology‐driven sectors.

scholarly journals Antecedents of marketing integration in cross-border mergers and acquisitions

2015 ◽  
Vol 32 (1) ◽  
pp. 2-28 ◽  
Author(s):  
Rudolf R. Sinkovics ◽  
Noemi Sinkovics ◽  
Yong Kyu Lew ◽  
Mohd Haniff Jedin ◽  
Stefan Zagelmeyer
Keyword(s):  
Mergers And Acquisitions ◽  
Design Methodology ◽  
Negative Relationship ◽  
Cultural Integration ◽  
Management Styles ◽  
Content Type ◽  
Cross Border ◽  
Operational Level ◽  
Marketing Resources ◽  
Resource Combination

Purpose – The purpose of this paper is to examine operational-level implementation issues regarding mergers and acquisitions (M&As) in general, and resource combination and integration at the functional marketing level in particular. Design/methodology/approach – The paper introduces four factors (i.e. collaboration, interaction, marketing synergy, and the realignment of marketing resources) that support successful M&A marketing integration and enhance overall M&A performance. Findings – The results indicate that marketing synergy and the realignment of marketing resources contribute significantly to the extent of integration. At the same time, the authors find a significant but negative relationship between the interaction dimension and the speed of integration. Originality/value – The cultural integration of firms that feature different management styles and organizational cultures has been recognized as a particularly challenging aspect of cross-border M&As. This study explains factors that contribute to effective marketing integration in M&As.

Strategic look at making M & A less risky

2016 ◽  
Vol 32 (2) ◽  
pp. 23-25
Keyword(s):  
Mergers And Acquisitions ◽  
Design Methodology ◽  
Reading Time ◽  
Decision Processes ◽  
Theory And Practice ◽  
Strategic Decision ◽  
Strategic Decision Making ◽  
Content Type ◽  
Pertinent Information ◽  
Practical Implications

Purpose – This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach – This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings – Mergers and acquisitions strategies are not risk-free. Potential problems include integration difficulties, inadequate evaluation of target, inability to achieve synergy and complexity. The theory and practice of strategic decision-making need to take into account both economically rational and intuitive decision processes. Practical implications – The paper provides strategic insights and practical thinking that have influenced some of the world’s leading organizations. Originality/value – The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

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