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

Rannacher smoothing, Explain what is meant by a positive coefficient discre...

Explain what is meant by a positive coefficient discretization in the context of valuing options using numerical PDE methods. What is the main benefit of using a positive coefficie

Explain terminal value calculation at end of forcast period, Explain the te...

Explain the terminal value calculation at the end of the forecast period.  Why is it necessary? The firm whose business operation is being valued isn't expected to suddenly cea

Meaning of capital budgeting, Meaning of Capital Budgeting Decisions r...

Meaning of Capital Budgeting Decisions relating to irreversible commitment of funds to projects whose profits are to be reaped over a time span longer than the current account

Portfolio construction based on a factor model, Bond management evolution t...

Bond management evolution to some extent is linked to the increased volatility of the interest rate term structures which is in existence since seventies. Bond valuatio

Estimate the montly deposite, Mr. Moore will be 35 years at the end of the ...

Mr. Moore will be 35 years at the end of the month and he wishes to retire in 25 years. He plans to invest in a mutual fund earning 7.5 percent annual return compounded monthly an

Operational cycle, using the operating cycle and any other financial manage...

using the operating cycle and any other financial management knoweledge,dicuss the applicability of such a cycle to the poultry biussiness in uganda (consider broilers)

Determine the movements in working capital, Movements in working capital ...

Movements in working capital The year-end balances of trade, inventories and other receivables and payables are taken for current year-end as well as last year-end statement

How many types of segments in the mutual fund industry, How many types of s...

How many types of segments in the mutual fund industry? There are two segments into the mutual fund industry: long-term funds and short-term funds. In Long-term funds bond fund

Explain main drivers for changing to ipsas, Question: PART A With th...

Question: PART A With the view to modernise its accounting system Government is considering adopting International Public Sector Accounting Standards (IPSAS) so as to maxim

Function of stock market, Functions of a Stock Exchange The stock excha...

Functions of a Stock Exchange The stock exchange is a market place where investors trade in securities. It is a competitive market involving large numbers of buyers and sellers

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