BUSI 536 - Module 2 - Homework 1.docx

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Running header: Homework 1 1 M&A Discussion Questions Liberty University BUSI 536-D01: Mergers & Acquisitions March 31, 2019
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Homework 1 2 Discuss the Williams Act and the implications it places on mergers and acquisitions. The Williams Act of 1968 purpose is “to remove the secrecy that had heretofore cloaked transfers of corporate control”[Lau81]. Therefore, creating a more robust and regulated M&A process, giving both the securities markets and organizations involved the appropriate execution framework. Particularly, it “was a response to a wave of hostile coercive takeover attempts, primarily cash tender offers” [Sco11]. The tender offer is one made directly to the shareholder(s) and has an eight-factor test, one of which relates to the “offeree subject to pressure to sell his stock” [Pat18]. The act protected shareholders, ensuring they have the necessary information and timeframe – increased from seven to twenty days - available to them, to make a sophisticated decision. While the act slowed-down the M&A process cycle time, it allowed the creation of less hostile environments. The act also supports the Christian foundation, as depicted on Leviticus 26:23-24 “And if by these things you are not turned to Me, but act with hostility against Me, then I will act with hostility against you; and I, even I, will strike you seven times for your sins.” [Luk06]. Therefore, this act is a critical component to M&A activities, as it protects shareholders both from the bidder’s aggressive tactics, as well as internal opportunists. Describe and discuss why the time period of a commencement offer is crucial in an offer. The M&A process includes a strict timetable requiring the bidder to follow. Therefore, the commencement of the offer triggers the legal procedures and associated timelines related with the tender offer. One critical factor in the schedule is that the bidder has five business days to disseminate tender offer materials to security holders. “As soon as practicable on the date of commencement, a bidder must comply with the filing requirements of § 240.14d-3(a), the dissemination requirements of § 240.14d-4(a) or (b), and the disclosure requirements of § 240.14d-6(a).” [Fed99]. One of the recent examples is the one made by Sanofi to acquire all of
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Homework 1 3 the outstanding common stock shares of Bioverativ, Inc. on February 8, 2018 [San18]. As a result of following the process, “On February 7, 2018, Sanofi and its acquisition subsidiary commenced the Offer by filing with the U.S. Securities and Exchange Commission (the “SEC”) a tender offer statement on Schedule TO. Bioverativ intends to file a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC with respect to the Offer.” [San18]. Discuss the implications of Wellman v. Dickinson in the U. S. District Court for mergers and acquisitions.
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  • Fall '19
  • NoProfessor
  • Sherman Antitrust Act, Clayton Antitrust Act, Tender offer, Williams Act

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