14 Malkin square,
Predator Plc has proposed to Target Plc to acquire all the issued share capital for cash. As both, the company has their share and capital listed on the stock exchange in London. Predator has believed that the word is likely to be received by the Target board members. Bu, there was neither announcement made by the Target in the public nor any approaches has been made. Thus, this letter has been drafted for advising James Kine to take over the scheme under the Mergers and Acquisition Law and Practice
According to the Merger and Acquisition Law practice, it can be stated that the branch of this law deals with the company’s corporation branch to purchase or merge with other companies. In the legal view point, it can be stated that it is a legal consolidation to merge two legal entities into one. This is considered as a valid entity when there is an acquisition of ownership of another entity's stock, assets and also equity interest. From the view point of commercial and economical matters, it can be stated that the transaction under proceed is based on the liabilities and assets which are under one entity. The legal structure of the Merger and Acquisition states that the act has the effect on the business of one party under indirect ownership to that of the other party's shareholder. The term acquisition means to takeover or to purchase the business of on party by another party (Hayes, 2014).
This purchase includes 100% or almost 100% of the ownership of assets, equity or entity acquired. Consolidation means when two company's combine with each other to form a new enterprise in an independent manner. As identified in the case study that Predator wants to acquire all the shares of Target as though Target is in a competitions business with other in the Predator group. In the case study, it is also seen that Predator has built a 25% stake in Target (Moeller & Brady, 2014).
As stated in the legal structure of the Merger and Acquisition Law and practice it can be seen that the corporation acquisition is basically for the reasons of asset purchase in which the seller sells assets to the buyers or equity sharers (Macnab, 2013). Purchasing of assets are basically for the most interested part of particular intellectual property matters, but the buyers do not acquire any liability or any relationships which are contractual. So it can be stated that the buyers who shares of the company are therefore under the target of the company from which they purchase (Ward, 2014).
As there is a control of ownership over the company’s assets, there is a transaction which is being carried on with all the liabilities which are acquired by the business through its past and the company faces all the risk in the commercial environment. Predator Plc has made no approach to the Target Plc to acquire the shares, but the provision that is made in the Act states that the acquirement can be made in a competitive bid for the shares in a company by announcing it publicly. In the provisions, it is also stated that the bid must be made in details within 15 days of the announcement which is based in public detail (Krishnan & Masulis, 2013).
The announcement detail of announcement must be at least for the number shareholders as well as share which the first bidder bid for. There are also certain provision regarding the revision of bid under regulation 39 of the act that the bidder can alter his bid if it is suitable for the revision process that is basically favorable for the shareholders in amalgamation scheme. There is the only fixed period of three working days for the revision before the beginning of the trending period. As per the details provided about the matter, we can state that approach was not made by Predator Plc to Target Plc to acquire the whole of the share of the issued share capital. Neither there was any public announcement made, but the provision states that to make an acquisition of share there must be a proper publication regarding the recommendation must be made to the committee which belongs to the independent directors. Which must be at least before the two working days before the trending period commences? Acquisition s must be made after the formalities have been completed. According to the principles of Merger and Acquisition Law, there are certain processes under the acquisition which involve a company acquires assets of the other company. As shares of the company are regarded as its assets so to acquire those there is a distinction which is depended on the process whether the company stock of targets is under the trade of public or not. Acquisition can also be differentiated as hostile or friendly, and it depends on how the target company is perceived by the acquirer (Murray, 2013).
There is also a role of Securities and Exchange Commission regarding these kinds of transactions. To make it clear that there are no means of illegal process or activities involved in its acquisition which includes improper devaluation of stock, trading with insiders, or other kinds of conducts which are inappropriate. But some process is not followed by Predator Plc, so the advice to the company from our firm is to follow these rules and regulations mentioned under the Mergers and Acquisition of law and practice (Malhotra & Gaur, 2013). So to acquire the whole of the share capital of Target Plc as they both are listed and traded on the market in the London stock exchange, there must be various measures under the act of Mergers and Acquisitions and Law practice which is to be taken into consideration. So according to the advice of the supervisor it the suggestion to the Chairman of predator Mr. James Kines that the Legal procedures are to be followed as given in this letter or for any further query to provide with its details (Lebedev et al., 2015).
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Krishnan, C. N. V., & Masulis, R. W. (2013). Law firm expertise and merger and acquisition outcomes. Journal of Law and Economics, 56(1), 189-226.
Lebedev, S., Peng, M. W., Xie, E., & Stevens, C. E. (2015). Mergers and acquisitions in and out of emerging economies. Journal of World Business, 50(4), 651-662.
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Moeller, S., & Brady, C. (2014). Intelligent M & A: Navigating the mergers and acquisitions minefield. John Wiley & Sons.
Murray, J. (2013). Defending Patagonia: Mergers & Acquisitions with Benefit Corporations. Hastings Business Law Journal, 9(485).
Ward, P. C. (2014). Federal Trade Commission: Law, Practice and Procedure. Law Journal Press.