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Pop quiz 3

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Kristian Krnić 1bp Božidar Klarin-Petrina 1bp
MacKenzie Moore 1bp Ema Gorup 2pb
Dan Stričević 1bp Zvonimir Medvidović 1bp
Martin Obad 1bp Iva Pervan 2bp

Financing capital:
discuss opportunities & threats

• government subsidies
• bank loans
• issuing bonds
• issuing shares 
acquisitions: buyouts and takeovers

p 105 .. → MK..Why? to reinforce your position to reduce competition to rationalize production to diversify products/markets to gain access to new technology.

take possession of • Explain the difference between takeovers and mergers • Explain: supply chain vs. get. take. distribution chain Explain the difference between horizontal and vertical integration • Explain the difference between forward and backward integration • 1 Horizontal integration A enables cost savings 2 Vertical integration B increases market share and reduces competition . buy.Unit 21: Takeovers Pg 1 • How can companies use their profits? • Provide synonyms of acquire: attain. purchase.

distribution chain • Explain the difference between horizontal and vertical integration • Explain the difference between forward and backward integration • 1 Horizontal integration A enables cost savings 2 Vertical integration B increases market share and reduces competition . purchase. take possession of • Explain the difference between takeovers and mergers • Explain: supply chain vs. take. get.Unit 21: Takeovers Pg 1 • How can companies use their profits? • Provide synonyms of acquire: attain. buy.

Mergers (integrations) with: competitors = horizontal integration v e r distributors = forward integration t i c suppliers = backward integration a l .

Pg 2 • Explain the difference between a raid and a takeover bid Advantages Disadvantages A raid A takeover bid ●Explain the difference between a friendly and a hostile bid .

.. The bidder is interested in. bid) – to offer to pay a particular price for sth. Vocabulary • to bid (v irregular: bid.. such as goods. The company is bidding 910p a share for control of AB Ports. shares.unwanted / unsolicited / hostile<>friendly bid . property. • a bid (n) – a price offered to buy sth. bonds (Longman BED) Takeover bids: ..

Pg. 4 • Explain conglomerate • What does LBO stand for? • L_______d b_____s • Which globally famous Hollywood movie involves a male character who specializes in LBOs? • Do you remember what it is he is doing in the movie? . 3 • Why do investment banks encourage companies to take over other companies? Pg.

p 106 & complete →Takeovers handout → LBO handout .Pg. 4 cont. • Explain: undervalued on the stock market • Explain: market capitalization • Explain: leveraged • Explain: asset-stripping • Why is the risk involved in LBOs small? HW: Vocabulary.

What is missing? • ~ between • ~ talks • ~ proposal • ~ agreement • conglomerate ~ • defensive ~ • horizontal ~ • vertical ~ .

+ n.What is missing? MERGER • a merger between similar banks but to merge with a similar bank • merger talks • merger proposal n. • merger agreement merger ≈ integration • conglomerate merger • defensive merger • adj. • horizontal merger / integration • vertical merger / integration . + n.

What is missing? friendly ~ hostile/unfriendly ~ leveraged ~ creeping ~ ~ battle ~ bid What is missing? leveraged ~ (LBO) employee/staff ~ management ~ (MBO) .

What is missing? TAKEOVER friendly takeover hostile/unfriendly takeover leveraged takeover creeping takeover takeover battle takeover bid What is missing? BUYOUT leveraged buyout (LBO) employee/staff buyout management buyout (MBO) .

Review: M & A .

akeovers b______) uyouts Merger (integration with): companies in un___ related fields Conglomerates a________ cquisition LBO financed by debt stripped of assets & split up . Mergers & acquisitions → asset stripping Success → Retained earnings → Investments in R&D Acquisition of other companies (t________.

CORPORATE RAID . JOINT VENTURE 6. FRIENDLY TAKEOVER 3. ACQUISITION / TAKEOVER 2.TYPES 1. MERGER 5. HOSTILE TAKEOVER 4. LEVERAGED BUYOUT 7.

of the target company's ownership stakes in order to assume control of the target firm ACQUISITION / TAKEOVER .Cooperation of two or more individuals or businesses. each agreeing to share profit. if not all. in a specific enterprise JOINT VENTURE Combining two or more companies to form a new one MERGER Corporate action in which a company buys most. loss and control.

the assets of the company being acquired are used as collateral for the loans in addition to the assets of the acquiring company. LEVERAGED BUYOUT . Often. HOSTILE TAKEOVER Acquisition of another company using borrowed money (bonds or loans) to meet the cost of acquisition.A takeover that a company being taken over agrees to. FRIENDLY TAKEOVER A takeover that a company taken over does not want and doesn’t agree to.

• buying a large number of shares in a corporation with undervalued assets to obtain voting rights to increase share value and thus generate a massive return CORPORATE RAID VOCABULARY To make a takeover bid to merge To use the poison pill to take over To find a white knight to acquire .