Introduction to Corporate Finance

xxii

21-3 Do Mergers Create Value? 734

21-3a Merger Valuation Methods 735

21-3b Shareholder Gains (or Losses) in Mergers – Returns to Bidder and Target 737

21-3c Method of Payment 738

21-3d Returns to Bondholders 739

21-3e How Do Target CEOs Make Out? 740

21-4 Merger and Acquisition Transaction Details 741

21-4a Types of Mergers 741

21-4b LBOs, MBOs and Recapitalisations 742

21-4c Takeover Defences and Divestitures 744

21-5 Accounting Treatment of Mergers and Acquisitions 746

21-6 Regulation of Mergers and Acquisitions 748

21-6a Antitrust Regulation 748

21-6b International Regulation of Mergers and Acquisitions 750

21-6c Other Legal Issues Concerning Corporate Control 751

21-7 Corporate Governance 751

21-7a Duties of the Board in the Context of M&A 752

Summary 754 | Key terms 755 | Questions 755 | Problems 756 |min

■ MINI CASE Mergers, Corporate Control and Corporate Governance 760

■ Online Study Tools 761

CHAPTER 22 INSOLVENCY AND FINANCIAL DISTRESS 762

■ WHAT COMPANIES DO: Going for Broke? 762

22-1 Insolvency and Business Failure 763

22-2 Insolvency Processes 765

22-2a The Voluntary Administrator’s Role 767

22-2b Deed of Arrangement 769

22-2c Other Processes in External Administration 771

■ FINANCE IN PRACTICE: Is Personal Bankruptcy an Option for Reducing Your Debts? 772

22-2d Affected Parties in Administration 772

22-3 Priority of Claims 775

22-4 Predicting Insolvency 777

Summary 779 | Key terms 779 | Self-test problems 779 | Questions 780 | Problems 781

■ MINI CASE Insolvency and Financial Distress 784

■ Online Study Tools 785

SMART solutions | p.781

SMART solutions | p.783

Contents