Legal Week has a news report on the law firms that advised on the transaction. They are Hogan & Hartson (for Ford), Herbert Smith (for Tatas) and Allen & Overy (for the consortium of banks). The report, however, does not mention about the involvement of any law firms on the Indian side. (In case you are unable to access the hyperlink above, please try copying the following and pasting on...
Fairness Opinions: Art or Science?
It has been said that valuation of a company is more of an art than a science. This has manifested again in the Bear Stearns transaction that is currently hogging limelight among legal circles. In this case, Lazard issued a fairness opinion when JP Morgan’s transaction with Bear Stearns was first announced that a stock consideration of $2 per share was fair to Bear’s shareholders. Now, under the...
Bear Stearns: Some Legal Complications
JP Morgan Chase yesterday increased its bid for Bear Stearns to $10 per share from its previous bid of $2, fearing a refusal by shareholders to approve its takeover of the beleaguered broking entity. Several large shareholders of Bear Stearns had expressed disappointment at the initial offer price put out by JP Morgan Chase. As the takeover battle progresses, some complications seems to have...
Special Purpose Acquisition Companies: On the Rise
Special Purpose Acquisition Companies (SPACs) that are also known as “blank check companies” are gradually acquiring prominence in the Indian markets. It is worth briefly examining these entities and their advantages as well as the risks surrounding them. SPACs are essentially shell entities with no business operations, and which raise funds from the public through an initial public offering...
India Business: A Few Updates
1. Indian Acquisitions in the United StatesOne of our regular readers, Mohit Gogia, who is a lawyer currently based in New York, brings to our attention a report titled “US-Bound Acquisitions by Indian Companies” that has been prepared by Virtus Global Partners. This report contains a snapshot of Indian acquisitions of US companies, both quantitatively and qualitatively. The gist of their...
Hostile Takeovers & Embedded Defences
The Financial Times reported last week in the context of EADS (the maker of the Airbus aircraft) that “France and Germany are finalising changes to EADS’ corporate by-laws to prevent foreign investors building significant stakes in – or even taking over – Europe’s flagship aerospace and defence company.” The plan is to restrict any investor deemed predatory from owning more than 15% in the...
Competition Act and Merger Regulation
Today’s Economic Times carries a column by Jaishree Vyavaharkar & David Jacobs of Baker & McKenzie analyzing the provisions of the Act and the recent draft regulations on business combinations, with specific reference to implications on foreign investors. Here are some excerpts: “A fundamental concern for foreign investors was the lack of domestic nexus in the Act. Effectively, deals...
Hostile Takeovers in India: Opportunities and Challenges (Part 2)
After dealing with the history of hostile takeovers in India and possible regulatory obstacles, Shaun’s article moves on to deal with what I find is an interesting analysis of the availability of some of the key takeover defences in the Indian context. I highlight some of his observations (and also intersperse some of my own) below: 1. Poison Pill A poison pill is a shareholder rights plan...
Hostile Takeovers in India: Opportunities and Challenges (Part 1)
Hostile takeovers of companies (otherwise referred to as the market for corporate control) is a rather well-known phenomenon in the corporate sphere. The 1980s (a.k.a. the deal decade) were famous in the US for large hostile transactions that set fire to lawyer ingenuity resulting in the development of various takeover defences. Hostile takeovers continue to pose a threat to companies – even as...
Some Lessons for M&A Deal Documentation
Recent months have witnessed a spate of M&A deals in the US that have turned sour even before they were consummated, and they have quite naturally ended up in court. In pure legal terms, these involve a scenario where disputes arise between the parties between signing of the definitive agreements and closing whereby one of the parties is not willing to perform its obligations under the...
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