Such information that holder of securities would

 Such information that holder of securities would
reasonably require to make an informed
assessment. 
 The recommendation of directors. 
 An expert’s report is mandatory in the event
that:
- Acquirer’s existing voting % in target >30%,
and/or
- There is a common director.
Conditional offer:
 No material adverse change in financial position of target during the bid period
 Receipt of a nominated % of acceptances
 FIRB or ACCC approval (if applicable)
 Mo material litigation arises during bid period.
Week 8
Private Equity capital:
 A source of capital for enterprises in addition to that available through public capital markets
 Participation in an M&A activity
 Development of privately owned company for re sale ‐
 Hive-off of business of a conglomerate (transfer part of business to new ownership by selling it)
 The provision of venture capital
 Financing of leveraged or management buyouts.
Types of private equity transactions
1. Purchase of a private company:
– A source of expansion capital and management expertise to develop
company for trade sale or an IPO.
– Assists business owners who wish to convert assets from fixed to liquid.
2. Purchase of a public company:
– Smallest, but most publicised activity.
3. Purchase of division of publicly listed company:
– Non core businesses.
Principal contributors of equity funds to private equity funds

Direct investment: is made by private equity firms in other firms that are seeking expansion capital or
have been identified as a buy-out target.
Indirect investment: represents the equity component in the direct investment. It represents the
capital contributed by those that invest in the funds controlled by private equity firms. These funds
will invest in 3-4 companies.
 More passive form than indirect investment involves investors (institutional or retail investors)
investing in a diversified fund of private equity funds (funds of funds)
Role of managers
 Assess hundreds of potential investments, conduct detailed due diligence on around 10%, or
around 10-15 investments
 Stress: o
- The closed end nature of funds
- Many funds will have an investment strategy mandate ‐ see Lecture Slide 13
- Funds likely to be spent progressively over 3 years, with fund life from 5 10 ‐ years
- Discuss J curve returns.
- Managers must: 
o Assess applications for funds & then carry out due diligence on certain
selected final applicants. 
o Complete a Terms Sheet with selected applicants ‐ see overhead 65 ‐ indicate
purpose of each condition.
o Become involved with introduction of new key management (if needed),
strategy & planning, and networking with potential new suppliers and
purchasers. Need to spend up to 3 to 4 days per month with selected companies.
 The fee structure should also be discussed ‐ Lecture Slide 13. Explain it represents a fee for
management services/finance availability/strategic advice/networking provided.