Control actions - Regulatory problems in control transactions - Control transactions

5 important questions on Control actions - Regulatory problems in control transactions - Control transactions

What are the three acquisition methods of control transactions? TQ

P 206

1. Private contracts with a single or a small number of important shareholders (sale of control)
2. Purchases of shares on the markets
3. General and public offer (friendly or hostile) to all the shareholders of the target company

What are the two mechanisms to effect control shift with regards to corporations and their legal techniques? TQ


P 205
1. Mergers: involves corporate decisions usually by both shareholders and the board, and often by all companies involved

2. Control transactions: these are affected by a private contract between the acquirer and the shareholders individually

What are the differences between a merger and a control action? TQ

P 205

A merger involves corporate decisions, usually by both shareholders and the board and often by all companies involved. Control actions are affected by a private contract between the acquirer and the shareholders individually.

Similarity: the takeover
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Why are publicly traded companies usually the focus of takeovers? TQ

P 206

Hostile bids are hard to organize in other relations to publically traded companies.
- Shareholder agency coordination is less hard in companies with fewer shareholders
- Legislation specific to control transactions is mostly confined to companies whose securities are traded on the public market.

Who are takeovers usually profitable for? TQ

P 206-207

For the target shareholders, whilst the share price of the bidder is frequently unaffected by the bid or may even go down.
- However: takeovers usually create value for both groups together

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