Explain takeovers obligation, Financial Management

Assignment Help:

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.

Related Discussions:- Explain takeovers obligation

Pvif, how do we get the pvif of a perpetuity

how do we get the pvif of a perpetuity

Calculate the net present value of cash flows, Assume a firm has the follow...

Assume a firm has the following cash flows for the next five years: $50,000, $100,000, $150,000, $200,000, and $300,000. We start this business with an initial investment of $250,0

First, how do you calculate the current ratio

how do you calculate the current ratio

What are the market conditions of cost of capital, What are the Market cond...

What are the Market conditions of cost of capital Security may not be readily marketable when investor wants to sell; or even if a continuous demand for security does exist, p

Equity claims and debt instruments in financial securities, What is the dif...

What is the different between equity claims and debt instruments in financial securities? By getting conclusion about equity claims and debt instruments, that equity claims are

Securities analysis, 7. Bill Peters is the investment officer of a $60 mill...

7. Bill Peters is the investment officer of a $60 million pension fund. He has become concerned about the big price swings that have occurred lately in the fund’s fixed income sec

Show the graphic presentation of net income approach, Q. Show the Graphic P...

Q. Show the Graphic Presentation of Net Income Approach? Graphic Presentation of Net Income Approach: - Net Income approach is described graphically as follows: In the

Explain safe harbour rule, Q. Explain Safe Harbour Rule? Safe Harbour R...

Q. Explain Safe Harbour Rule? Safe Harbour Rule - Concept in statutes and regulations whereby a person who meets listed requirements would be preserved from adverse legal actio

Determine the advantages of explicit cost, Determine the advantages of expl...

Determine the advantages of explicit cost Explicit cost of an interest bearing debt will be the discount rate which equates present value of the contractual future payments of

International bonds, International bonds are divided into two c...

International bonds are divided into two categories namely, foreign bonds and euro bonds. Foreign bonds are issued by a borrowing company in another

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd