A BEECHMONT CREST ONLINE GUIDE
MERGERS & ACQUISITIONS
Friendly vs. Hostile Mergers
Friendly and hostile mergers have different legal requirements.
Rules also vary depending on whether the merger transaction is financed by cash or stock.
Friendly merger / cash financed
Bidder must file a proxy statement with the SEC outlining the transaction.
This first statement is often just a draft. The SEC may make comments and require changes.
The final proxy statement is mailed to shareholders. They are also sent a proxy card to fill out and return.
The deal must be approved at a shareholders meeting.
Friendly merger / stock financed
Similar procedures to the above. The securities used to purchase the target shares must be registered. The bidder does this by filling out a registration statement.
Once the registration statement is approved, proxy statements are sent to shareholders.
Hostile transaction / cash tender offer
Bidder begins by sending tender offer materials to shareholders of the target company.
The provisions of the offer must comply with the Williams Act.
Unlike friendly merger situations, the SEC does not comment on materials sent to shareholders.
Hostile merger / stock tender offer
Bidder begins by submitting a registration statement. After the registration statement is declared effective, tender offer materials can be sent to shareholders. The bidder must first address any comments/changes made by the SEC.
The rest of the process is similar to that of the cash tender offer.