Explain takeovers obligation, Financial Management

Takeover, Inc. is a Delaware corporation whose only stated purpose is to acquire companies.  It has virtually no assets and no employees other than the original founders who contributed a total of $50,000.   The founders are well known in the investment community and were formerly affiliated with a very successful investment firm called the Carlyng "Make Money" Group.  Takeover registers and qualifies as a blank check company with the SEC and raises $310 million under a Section 5 IPO.  After commissions and underwriting fees, it is left with $300 million.  It trades at about $10/share, about $2 above the offering price.  The founders allocate $50 million to operation of Takeover, e.g., for salaries, office space, travel expenses, research, consultants, attorneys, etc, in their search for a takeover target.  Six months after completing the IPO, Takeover seeks to acquire Target LLC, a privately owned software company that makes "near field programs" used in Android, valued at about $250 million.  Seventeen months after the IPO, Takeover and Target reach an agreement for selling the company.

Answer the following questions based on SEC Rule 419, 17 CFR 230.419:

  1. After closing the IPO, explain Takeover's obligation with respect to the funds it raised from the IPO.
  2. Explain whether Takeover's use of $50 million for overhead, salaries, etc., is in accordance with Rule 419.  Are there any remedies?
  3. After reaching a purchase agreement with Target, explain Takeover's obligation to its shareholders under Rule 419.
  4. Assume that 3 million shares opt out of Takeover; explain Takeover's obligation to those shareholders.
  5. Will the transaction go forward to completion if the acquisition required:
    1. 100% cash.
    2. an exchange of cash and equity, i.e., the owners of Target get $150 million and 40% equity in Takeover.
Posted Date: 2/14/2013 6:49:41 AM | Location : United States







Related Discussions:- Explain takeovers obligation, Assignment Help, Ask Question on Explain takeovers obligation, Get Answer, Expert's Help, Explain takeovers obligation Discussions

Write discussion on Explain takeovers obligation
Your posts are moderated
Related Questions
Determine about the Systems based audit Systems based audit is useful as it would help identify risks within the processes in an organisation and review how adequate the contr

Public Financial Statements of a Company The final exercise is the valuation of a publicly held company's equity. You must base your valuation on the company's public financia

Regulatory Aspect Employees Provident Fund Organization (EPFO) is under the Ministry of Labor and is a primary organization for retirement income for private employees in India

A company has a total investment of Rs 500,000 in assets, and 50,000 outstanding ordinary shares at Rs 10 per share (par value). It earns a rate of 15 per cent on its investment, a

Q. Relative costs and benefits? Option 1- Factoring Reduction in receivables days = 15 days Reduction in receivables =15/365* £20m = £821916 Option 2 - The

The theoretical spot rates for treasury securities represent the appropriate set of interest rates that should be used to value the risk from default-free cash fl

The UK Pension Fund System The UK Pension system is a three pillar pension system. A flat-rate first-tier pension is provided by the state and is known as the Basic State Pensi

The fundamental principle is that when a tree is used to value an on-the-run issue, the resulting value should be arbitrage free i.e., it should be equal to the o

List the arguments (variables) of which a FX call or put option model price is a function.  How does the call and put premium change with respect to a change in the arguments?

Explain about the retail and wholesale banks in the commercial banking. Retail and wholesale banks: Commercial banking can also be separated within retail and wholesale b