Deals in the Time of Pandemic
By Subramanian (Harvard Business School) and Petrucci (Harvard Law School)
GS Subramanian và GS Petrucci có bài với tựa đề như trên đăng ở Harvard Law School Forum on Corporate Governance. Ý đáng lưu ý cho luật sư M&A trong đoạn trích dưới đây có lẽ là nên xác định rõ lĩnh vực kinh doanh của công ty mục tiêu ngay trong chính hợp đồng M&A nhằm tránh tranh cãi về điểm này khi xác định tác động bất tương xứng (disproporationate effects).
Phần dưới bổ sung trích đoạn về cơ cấu giao dịch trong bài của Sidley Austin có tựa đề là Energizing the M&A Market Post-Crisis.
For transactional planners, our finding that disproportionality carvebacks have proliferated since 2005 emphasizes the importance of specifying the target’s industry in the merger agreement itself—so that the parties do not need to fight about the target’s industry and whether the effect on the target was disproportionate to that industry in subsequent litigation. (Anecdotal evidence from deals since our paper has been posted online suggests that practitioners have indeed begun specifying the target industry in the merger agreement itself.) Finally, and perhaps most importantly, we recommend that Delaware courts should read the ordinary course requirement according to its plain meaning—i.e., requiring the target to operate in the ordinary course of business—which then forces the target to negotiate with the acquirer over any changes to the business that would be necessary to respond to extraordinary circumstances. We demonstrate in our paper why forcing this negotiation is optimal, from a law & economics perspective, as opposed to reading the ordinary course requirement to permit unilateral extraordinary actions in extraordinary times.
The full paper is available here.
See previous posts on this topic here, here, here and here.
Creative Deal Structures in the Spotlight
Creative deal structures offer a broad range of solutions for dealmakers facing practical problems as they consider M&A activity. Against a still-volatile market backdrop, survey respondents said the use of such structures is set to increase over the next 12 months, including:
Joint ventures/minority investments—deals involving two or more parties pooling their resources (including the target company in deals where the acquirer is taking a non-controlling, minority stake).
SPACs—companies with no commercial operations that are formed in order to raise capital through an initial public offering (IPO) for the purpose of acquiring other businesses as opportunities arise.
PIPE deals—the purchase of a public company’s stock by a private investor, rather than on a public exchange.
Club deals—acquisitions involving multiple private equity purchasers.
Equity clawbacks—provisions in deals that provide the seller with a means to benefit in the event that the buyer subsequently sells the business.
Convertible debt investments—the use of debt securities that offer equity conversion rights.
Contingent consideration/earn-outs—deals offering additional payments to the seller in the event that the business sold hits set performance targets or meets other criteria.