í´ì¸ M&Aì ë²ì ìì - Sullivan & Cromwell
í´ì¸ M&Aì ë²ì ìì - Sullivan & Cromwell
í´ì¸ M&Aì ë²ì ìì - Sullivan & Cromwell
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Unsolicited Deal Schematic<br />
continued<br />
Go Away<br />
SELECT<br />
TARGET<br />
Private<br />
Letter #1<br />
Friendly<br />
Meeting<br />
Private<br />
Letter #2<br />
- Defensive profile<br />
of Target<br />
(influences<br />
timing of<br />
approach)<br />
- Detailed<br />
financial and<br />
legal analysis<br />
- Bid price<br />
- Financing, if<br />
cash deal<br />
- Regulatory<br />
analysis (i.e.,<br />
antitrust, CFIUS)<br />
- Seeks friendly<br />
meeting<br />
- Indicates price<br />
or range<br />
- Indicates<br />
potential form<br />
of consideration<br />
- Indicates no<br />
intent to disclose<br />
offer<br />
- Seeks ―public<br />
company‖<br />
due diligence<br />
- May offer<br />
assurance on<br />
regulatory<br />
review/ no<br />
financing risk<br />
- Willingness to<br />
sign a standstill?<br />
- Script<br />
- Generally<br />
choreographed<br />
on both sides<br />
- But nature of<br />
response can be<br />
informative<br />
- Willingness to<br />
meet at all could<br />
be significant<br />
- Request for<br />
―exclusivity‖<br />
Same as prior<br />
except:<br />
- May show price<br />
increase<br />
- Likely to show<br />
financing<br />
―commitments‖<br />
- Likely to<br />
implicitly or<br />
explicitly indicate<br />
―going public‖ if<br />
rejected<br />
- Deadline for<br />
response<br />
Publicly<br />
Release<br />
Offer Letter /<br />
Leak<br />
Make Public<br />
Tender Offer<br />
/ Proxy<br />
Contract<br />
Negotiated<br />
Deal<br />
Wait for<br />
Stockholders<br />
to Pressure<br />
Board to<br />
Negotiate<br />
Risk of “leak” probability rises with each step.<br />
43
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