COMMERCE 3FA3 Chapter : 3FA3-CH23.docx
11 Apr 2012
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Amalgamations: combinations of firms that have been joined by merger, consolidation, or acquisition. Merger: the complete absorption of one company by another, where the acquiring firm retains its identity and the acquired firm ceases to exist as a separate entity. Consolidation: a merger in which a new firm is created and both the acquired and acquiring firm cease to exist. Tender offer: a public offer by one firm to directly buy the shares from another firm. Circular bid: corporate takeover bid communicated to the shareholders by direct mail. Stock exchange bid: corporate takeover bid communicated to the shareholders through a stock exchange. Proxy contests: attempts to gain control of a firm soliciting a sufficient number of shareholder votes to replace existing management. Going-private transactions: a private group replaces all publicly owned stock in a firm with complete equity ownership. Leveraged buyouts (lbos): going-private transactions in which a large percentage of the money used to buy the stock is borrowed.
