mergers and acquisition : friendly takeover

8/9/2019 mergers and acquisition : friendly takeover

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FRIENDLY TAKEOVER

Prepared By:

Annu (030)

Pooja Rana (0!)


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FRIENDLY TAKEOVER

Is one where the acquirer acquires the shares of the target by informing the board

of directors his intention to purchase the shares of the target company

If board feels the offer is worth accepting, it recommends to the shareholders

that the offer be accepted

Company A wants to acquire company B. If company Bs board agrees to the

terms of the takeover, it is referred to as a friendly takeover.

If company Bs board reects the offer, however, company A may proceed

anyway in what is referred to as a hostile takeover.


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ADVANTAGES OF FRIENDLY TAKEOVER

TRO!G "!R#ASE OF ASSETSAllows acquirer to purchase only those assets that it desires to

purchase

Acquirer is not required to take over any contingent liabilities of thetarget

%rovides the acquirer with an opportunity to negotiate the price with

the board of directors, as the approval of the shareholders is notrequired.


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ADVANTAGES OF FRIENDLY TAKEOVER

TRO!G "!R#ASE OF STO#KAcquirer has to assume the liabilities of the target firm

#arget firm may continue to operate as an autonomoussubsidiary or it may be merged with the acquiring firm

Approval of the shareholders of the target firm is

needed for this type of acquisition


6/18

"RO#ESS OF FRIENDLY TAKEOVER

the preparation of the purchasing program

signing the preliminary terms

announcing the intension of purchase transaction and

e&plaining the reasons

the act of takeover connected with making the decisions

about the make'up of new board of directors

working out the plan of industrial conversion

implementation of the new long'term policy related to newopportunities

the evaluation of the results of takeover


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A #A$E $T%DY ONFRIENDLY TAKEOVER

OF

YA&OOBY

'I#RO$OFT


8/18

PROPO$AL (Fe *+ ,00- )

Microsoft Corp. (NASDAQ:MSFT) has made a proposal tothe ahoo! "nc. (NASDAQ:#$$) %oard of Directors toac&'ire all the o'tstandin shares of ahoo! common

stoc for per share consideration of *+, representin atotal e&'it- al'e of appro/imatel- *00.1 2illion.

Microsoft3s proposal 4o'ld allo4 the ahoo! shareholdersto elect to receie cash or a 5/ed n'm2er of shares ofMicrosoft common stoc6 4ith the total consideration

pa-a2le to ahoo! shareholders consistin of one7halfcash and one7half Microsoft common stoc.

The o8er represents a 19 percent premi'm a2oe theclosin price of ahoo! common stoc as on an. +,6 9;;


9/18

$.e/e Ba1er+ #EO '2ro4o5.

=>e hae reat respect for ahoo!6and toether 4e can o8er anincreasinl- e/citin set of sol'tionsfor cons'mers6 p'2lishers andadertisers 4hile 2ecomin 2etterpositioned to compete in the onlineserices maret6? said Stee%allmer6 chief e/ec'tie o@cer ofMicrosoft.

=>e 2eliee o'r com2ination 4ill

delier s'perior al'e to o'rrespectie shareholders and 2etterchoice and innoation to o'r

c'stomers and ind'str- partners.?


10/18

'2ro4o5. 62/e4 Ya7oo T7ree 8ee94To Aep. Fr2endy Ta9eo/er

Microsoft said Sat'rda- that ahoo m'st accept its2'-o't o8er 4ithin three 4ees or face a hostile pro/-2attle. The compan- also said it 4o'ld lo4er its o8erfor the "nternet iant if its forced to o the pro/-

ro'te.B"t has no4 2een more than t4o months since 4emade o'r proposal to ac&'ire ahoo at a 19 premi'mto its closin price on an. +,6 9;;


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TRAN$A#TION $%''ARY

$FFE

Transaction al'ed at appro/imatel- *00.1 2illion incash and stoc

19 premi'm to ahoo! Closin rice on ,G+,G;indo4s and Microsoft3s other proprietar-

technoloies to ahoo3s online properties and serices.%allmer also noted =operational e@ciencies? as an

'pside to =eliminatin red'ndant infrastr'ct're andd'plicatie operatin costs.?

merin 'ser e/periences6? 4here he aain repeatedan intent to =drie innoation in emerin scenarioss'ch as ideo6 mo2ile serices6 online commerce6social media6 and social platforms.


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Contd

Share in >e2 Search

Ioole7 L+

ahoo7 ,.

Microsoft7 ,9.

%- 2'-in ahoo6 Microsoft hopes to co22le toethersomethin that can compete 4ith Ioole in terms of

sie.


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YA&OO PRE$ENT$ A N%'BER OF $ERIO%$

#&ALLEN6E$ FOR A 'I#RO$OFT TAKEOVER:

An- =s-ner-? 2et4een the t4o can alread- 2erealied thro'h friendl- partnerships.

The t4o partners hae massie prod'ct oerlap

Microsoft and ahoo share little c'lt're and ision.%rain Drain

Fleein C'stomers.

Fleein artners


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T&ANK YO%

mergers and acquisition : friendly takeover

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