On February 15, 2011, NYSE Euronext and Deutsche Böerse AG announced that they had entered into a business combination agreement. The combined group will be headquartered in both Frankfurt and New York.
The transaction is structured as a combination of NYSE Euronext and Deutsche Böerse under a newly created Dutch holding company which will be effected through a merger and a public exchange offer. NYSE Euronext will merge with a US subsidiary of the new holding company, and each NYSE Euronext share will be converted into 0.47 of a share of the new holding company. The new holding company will also launch a public exchange offer, and Deutsche Böerse shareholders may tender their Deutsche Böerse stock on a one-to-one basis for shares of the new holding company.
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NYSE Euronext and Germany’s Deutsche Börse, two of the world’s largest stock exchange operators, announced this week that they are in “advanced discussions” regarding a possible merger which would create the largest stock exchange in the world. According to Reuters, the board of NYSE Euronext is expected to meet this weekend to discuss the planned takeover.
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The United Kingdom’s Panel on Takeovers and Mergers has recently proposed amendments to its Takeover Code that would change the rules regarding hostile offers in order to correct what it called a “tactical advantage” for bidders. The Panel opined that it has “become too easy for ‘hostile’ [bidders] to succeed” and that “short-term” investors (i.e., those investors who buy shares of a target company during the offer period) have unduly influenced the outcome of these hostile offers.
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According to a recent survey of 440 senior executives around the world, M&A activity is expected to increase in the next two years while major fundraising initiatives largely remain on hold. The survey showed that “respondents see M&A activity as the area where an increase in transaction volumes is most likely (49%), compared to 12 months ago, followed by an increase in IPOs (31%).” However, only 38% of corporate respondents stated that they expect to raise fresh capital in the next two years. Due to the anticipated lack of fundraising activity in coming years, competition for capital is expected to remain high and the trend of corporations hoarding cash reserves, for investment or as an eventual return to investors, may increase. In response to the survey results, Doug Guzman, Head of Global Investment Banking at RBC Capital Markets, stated that “the ability for corporations to part-fund their own transactions through cash reserves will be extremely attractive to banks, who are increasingly looking to reduce their exposure to risk.”
More information about the results of the survey, which was conducted by the Economist Intelligence Unit and commissioned by RBC Capital Markets, may be found here.
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Ernst & Young’s Capital Confidence Barometer reported encouraging developments based on the accounting firm’s ongoing study that measures corporate confidence in the global market. After surveying more than 800 executives from over 50 countries across more than 40 industries, E&Y reported that the majority of respondents predict the economic downturn will end in their industry within 12 months, with the highest level of confidence noted in the automotive industry. This is a vast improvement over the results of E&Y’s 2009 survey, and the optimism is fueled by the fact that almost half of the companies are expecting to make an acquisition in the next six months. Cash remains the single largest means of funding acquisitions, while the use of debt as a source of funding continues to decline.
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Carl Icahn announced on Friday an extension of his tender offer to acquire outstanding common stock of Lions Gate Entertainment Corp. for $7.00 cash per share. According to his press release, the offer will now expire on June 1, 2010, unless extended or withdrawn.
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Investor Carl Icahn scored a temporary victory in his hostile bid to take over Lions Gate Entertainment, when the British Columbia Securities Commission (“BCSC”) granted an application to invalidate the Lions Gate poison pill. On April 27, 2010, the BCSC ordered a “cease trading” with respect to the poison pill adopted by Lions Gate’s board on March 11, 2010, just 10 days after the Icahn Group launched its $7 per share tender offer.
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On March 28, 2010, Zhejiang Geely Holding Group Company Limited entered into a stock purchase agreement with Ford Motor Company to acquire 100% of the outstanding shares of Volvo Car Corporation for $1.8 billion, with approximately $1.6 billion of that amount to be paid in cash. The sale is expected to close in the third quarter of 2010 subject to regulatory approval. The deal has not been without naysayers, particularly with respect to the fate of Volvo in the hands of a newcomer to the automotive sector best known for low-end vehicles.
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This Securities Law Alert discusses the Securities and Exchange Commission’s (SEC) unanimous vote yesterday to publish for public comment a Roadmap that could potentially phase out the application of United States Generally Accepted Accounting Principles (GAAP) by U.S. issuers, beginning in the year 2014, and instead mandate the application of International Financial Reporting Standards (IFRS) for financial reporting.
The advisory is provided in PDF on the Alston & Bird web site: http://www.alston.com/securities_law_roadmap
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This advisory discusses the Securities and Exchange Commission’s (SEC) unanimous approval today of amendments to certain rules and forms in an effort to modernize its disclosure requirements for foreign companies.
The advisory is provided in PDF on the Alston & Bird web site: http://www.alston.com/securities_alert_new_rules_private_issuers
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This advisory discusses a recent roundtable discussion, hosted by the Securities and Exchange Commission (SEC), on the performance of International Financial Reporting Standards (IFRS) and United States Generally Accepted Accounting Principles (U.S. GAAP) during the present subprime crisis. The roundtable participants represented a cross section of investors, issuers, auditors and other market participants, in both the United States and the European markets, with experience in considering and/or evaluating company financial statements prepared in accordance with IFRS or U.S. GAAP, as well as special observers from the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB).
The advisory is provided in PDF on the Alston & Bird web site: http://www.alston.com/seclaw_advisory_SEC_discussion_IFRS
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This advisory discusses the full text of proposed amendments to the cross-border tender offer rules under the Securities Exchange Act of 1934, as amended, recently released by the Securities and Exchange Commission. These are the first proposed changes to the rules since they were initially adopted in 1999. The proposed rules generally provide for an expansion of the exemptions for Tier I and Tier II cross-border transactions, including changes in how U.S. securities ownership is calculated and the codification of certain interpretive positions and exemptions frequently granted by the SEC in cross-border transactions due to conflicts with foreign regulatory regimes.
The advisory is provided in PDF on the Alston & Bird web site: http://www.alston.com/securities_advisory_crossborder
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At an open meeting on November 15, 2007, the SEC approved amendments that will allow foreign private issuers to submit periodic reports or registration statements to the SEC that contain financial statements prepared in accordance with IFRS without reconciliation to generally accepted accounting principles as used in the United States.
The advisory is provided in PDF on the Alston & Bird Web site: http://www.alston.com/securities_advisory_ifrs
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