identifying concerns and overcoming risk in european ma opportunities marc fredj simmons simmons...
DESCRIPTION
3 / Doc ID: ppt © Simmons & Simmons 2009 Identifying concern: Access to information Auctions vs exclusivity situations Private vs listed targets NDAs –Signatories –Vendor protection Timing of disclosureTRANSCRIPT
Identifying Concerns and Overcoming Risk in European M&A Opportunities
Marc Fredj
Simmons & Simmons Tel Aviv, Israel 16 June 2010
ACC ISRAEL ANNUAL CONFERENCE
2 / Doc ID: 8250499.ppt
© Simmons & Simmons 2009
Identifying Concern and Overcoming Risk
Identifying concern: Access to information
Identifying Concern: Due Diligence
Identifying Concern: Disclosure
Overcoming Risk: Conditions Precedent
Overcoming Risk: MAC Clauses
Overcoming Risk: Price Adjustments
Overcoming Risks: Earn Outs
Overcoming Risk: Indemnities
Overcoming Risk: Warranties
3 / Doc ID: 8250499.ppt
© Simmons & Simmons 2009
Identifying concern: Access to information
Auctions vs exclusivity situations
Private vs listed targets
NDAs– Signatories– Vendor protection
Timing of disclosure
4 / Doc ID: 8250499.ppt
© Simmons & Simmons 2009
Identifying concern: Due Diligence
General purpose
Specific purpose
Types of due diligence – coordinating
Scope
5 / Doc ID: 8250499.ppt
© Simmons & Simmons 2009
Identifying concern: Due Diligence
Materiality
Vendor due diligence
Data Rooms
Communicating results
6 / Doc ID: 8250499.ppt
© Simmons & Simmons 2009
Identifying concern: Disclosure
Legal duty – contractual obligation
General vs Specific
Fair disclosure
Qualifications (materiality, knowledge)
Management’s position
7 / Doc ID: 8250499.ppt
© Simmons & Simmons 2009
Overcoming risk: Withdrawing from transaction
Pre-contractual stage:– good faith– break fees
Contractual stage:– conditions precedent (validity; benefit)
MAC Clauses
Breach of warranties
8 / Doc ID: 8250499.ppt
© Simmons & Simmons 2009
Overcoming risk: Adjusting value
Price Adjustment:– price determinable– recourse to experts– recovery: claims, escrow, deferred payments
9 / Doc ID: 8250499.ppt
© Simmons & Simmons 2009
Overcoming risk: Adjusting value
Earn Outs:– determination– neutralizing certain changes– tax treatment
10 / Doc ID: 8250499.ppt
© Simmons & Simmons 2009
Overcoming risk: Allocating identified and unidentified risks
Weaknesses of legal protections:– misrepresentation– eviction– hidden defects
11 / Doc ID: 8250499.ppt
© Simmons & Simmons 2009
Overcoming risk: Allocating identified and unidentified risks
Indemnities:– when to use– difference with warranties
12 / Doc ID: 8250499.ppt
© Simmons & Simmons 2009
Overcoming risk: Allocating identified and unidentified risks
Warranties– Scope– Indemnification:
– net assets– loss– beneficiary and tax impact
– Vendor protections
