M&A 3 Flashcards
(8 cards)
why did intesa initiate an hostile takeover?
At the time, Intesa had better profitability and returns than UBI. Intesa wanted to improve its competitive position with a compelloing business model, diversifying revenues stream and get more from commission fee of insurance (UBI).
what was intesa’s strategy to initiate the sale?
Intesa launched an OPA offering a premium of 27% over last trading days. Its strategy was to sell 400-500 branches (for anti-trust reason) to BPER for a consideration up to 1bn€.
what was the exchange ratio? and valuation?
The exchange ratio offered equal to 1.7x valuing Ubi 4.9 Billion.
what are the steps in an hostile takeover?
- Tender Offer: statement from the bidding announcing to the mkt and to the CONSBO the initial notice of the offer.
- Filing of offer document: within 20 calendar days, offer document is filled and there is cash confirmation and transaction description.
- CONSOB and ECB (IASB for insurance) must review and approve the offer within 60 BDs. During the retrieval of extra information time is frozen (up to extra 20 BDs)
- Consob Approval of offer document: offer document published after approval and delivered to target company. Just here the offer is legally real.
- Issuer Statement (art. 103): by the last trading day before the start of the offer period, the issuer can say something about the offer (1st occasion).
- Tender offer start (Subscripton Period ): starts at least +5 business days after CONSOB approval of offer document.
- Tender offer ends (end of subscription period): it varies between 15 and 40 business days.
- Settlement: bidder must declare to the mkt if conditions were satisfied, in terms of subscription rate.
- Delisting: it takes from 1 to 3 months.
what were the 4 possible defence pillars for UBI?
The Defence pillars were the following:
- MAC Clause (from a legal standpoint) whether the transaction will be completed in any mkt conditions.
- Scouting alternative buyers.
- Show the full value of standalone strategy
- Highlight antitrust actions.
what could Ubi shareholders do in view of the transaction?
Which are the options of shareholders?
1. stick to standalone plan
2. find competing offer from other players
3. negotiate better offer from ISP
4. anything else subject to “passivity rules” to enhance value of the business.
which path did Ubi shares follow after the announcement?
The market followed a similar path to the one showed during IPOS.
what happens usually to the shareholder base of the target?
There is a lot of dialogue with investors which usually don’t like standalone plan because it is more uncertain, given that it is based on the future and why was not the plan approved before?
Long-only investors leave in favour of hedge funds and event funds, compared to IPO the situation is more uncertain given that the ownership of the companies varies a lot over the time.
