Managing The Merger And Acquisition Process

1148 Words5 Pages
John (1999) said that one of the biggest problems faced by those managing the merger and acquisition process. The world of business has transform from an industrial to an intellectual basis, and while those managing M&A 's are still busy studying all the old parameters, they are missed out all the new important point. In the industrial stage the primary assets responsible for creating wealth in the organization were tangible (Li, 2011). In the new intellectual stage intangible assets are a new primary driver of wealth. Unfortunately, most of the Merger & Acquisition managers ignores the function of intangible assets. When they miss this fact: • Key managers and scarce talent leave unexpectedly • Valuable operating synergies vanish…show more content…
In publicly held companies, "poison pills" refers to use various ways to prevent the takeover bids. Takeover bids is bidder trying to obtain control of the target company, either by soliciting proxies to get elected to the board or by acquiring a controlling block of shares and using correlation of the vote to get elected to the board of directors(Paul H. Malatesta, Ralph A. Walking, 1988). Common types of poison pills 1. Preferred stock plan: The target company issues a large number of new stock to existing shareholders, usually preferred shares. These new stock often have severe redemption provisions (Protect Yourself In A Merger -, 2016). If allowed occur acquisition, new stock will be converted into a large number of common share, it immediately dilute the percentage of target company stock acquirer’s, and makes it more expensive to obtain 50% of the target company stock. 2. Flipover right plan: Huge debts to the target company, and try to make the debt burden is too high and attractive. Finally, the acquirer will have to pay the debts of the target company. 3. Ownership flip-in plan: The target company purchase some smaller companies which using stock exchange, used to dilute the value of the target company’s stock (Wachtell, Lipton, Rosen & Katz.1999). 4. Back-end rights plan: This poison pill is designed to create talented employees and staff outflow, reducing the value of the enterprise as
Open Document