Friendly Takeover

Mergers and takeovers are forms of external growth within a business. External growth occurs when one firm decides to expand by joining together with another. A takeover specifically refers to the gaining control of a firm by acquiring a controlling interest in its shares (51%). Merger, on the other hand, means the joining with another firm to form a new combined enterprise, shares in each firm are exchanged for shares in the other.

• Analysis of the target company—is the company a strategic fit as far as size, geographic location, business mix, operational capacity, financial strength and availability for takeover.

According to our calculations Cooper Copper has an optimum bargaining position because they can offer up to $60.13 (at a 4% growth estimated rate) for it’s the stock in order to acquire the majority its shares. Porter 's offer of $42.00 per share failed to get the majority of shares need to acquire control. VLN 's offered to honor the price of $53.10 for preferred shares. This is the share value that speculators and stockholders would hope to obtain although the actual offer could end up to be much less. According to our calculations and analysis the best possible offer Copper can offer up to $60.13 (at a 4% growth estimated rate) per share for Nicholson stock.

In this chapter, we first provide coverage of expansion through corporate takeovers and an overview of the consolidation process. Then we present the acquisition method of accounting for business combinations followed by limited coverage of the purchase method and pooling of interests provided in a separate sections.

Mergers and acquisitions have become a growing trend for companies to inorganically grow a business within its particular industry. There are many goals that companies may be looking to achieve by doing this, but the main reason is to guarantee long-term and profitable growth for their business. Companies have to keep up with a rapidly increasing global market and increased competition. With the struggle for competitive advantage becoming stronger and stronger, it is almost essential to achieve these mergers. Through research I will attempt to dissect the best practices for achieving merger success.

Theoretically it is assumed that mergers improve the performance of the acquiring firm due to

Gascoyne Gold has been formed with 7 shareholders, which they have invested more than $1 million, setting up a state of the art processing and packaging facility. Before they have

For story 1, I have discussed two businesses which are Argos and Sainsbury’s who are undergoing an acquisition. Despite having a downturn in Sainsbury’s profits, they are still optimistic about this takeover. Reasoning behind such business deal, is to change their consumer habits, and help their purchasing process to be further accessible through help of technology. The economical approach suited for this case, is that Sainsbury has attempted to use external expansion, to grow their business further and monopolise their

Kodiak Energy entered into an agreement with to purchase land from Thunder River Energy in exchange for shares of stock in the Kodiak Energy Company. Kodiak Energy issued seven million shares reported to be worth $2.00 per share. The SEC decided to look into this arrangement and

reasonableness of the asking price and the likely effects of the acquisition on Brown-Forman’s share

This is an unusual type of corporate relationship. The first set of questions will reinforce your understanding of the relationship and provide evidence on the pros and cons of consolidation.

It is thought that when firms merge, the price paid by the acquiring firm should be fair value, because that firm is going to invest rationally. Yet, under rational investment, the shareholders of the acquired firm would never sell. For them, the uncertainty of new ownership would reduce the value of the holding. In order to accommodate for cashing out "early", the shareholders of the acquired company must be compensated. The acquiring firm therefore must pay an acquisition premium in order to entice the shareholders of the takeover target. The acquisition premium will depend on the specifics of the deal and the companies involved, where the industry is in the business cycle and whether or not the takeover is hostile (Milano, 2011).

Acquisitions and mergers is the growth strategy of many companies today. Sometime a company may decide to buy shares in another company while other times a company may decide to acquire the whole company. This paper discusses how Dow Chemical could benefit from the acquisition of DuPont. It will also cover the various accounting methods used.

3. Analyze the restructuring in the two years after the acquisition with regards to synergy effects.

Gupta (2013) mentioned the different motives organisations have for pursuing a merger and acquisition deal are strategic, financial and organisational motives. Conversely, Wheeler et al (2014) go to state the trends for an M&A deal are based on factors such as oil prices, capital availability, oil acquisitions, or strong valuation.