Doing Dumb Deals: Why They Happen

Acquirer’s management won’t stop themselves:
- Ego and arrogance
- Sunk cost/point of no return
- Need “to do something”
- Using the wrong pronoun
- “Ambition, persistence, optimism”
Acquirer’s financial adviser won’t stop acquirer’s management: why not?
- PR (and the next client)
- Fees
- League tables
- Fear factor
- “What the merchant banks won’t tell you”
The market won’t stop either acquirer’s financial adviser or acquirer’s management
- Lethargy of investors
- “The Lead Steers’ Paradox”
- The “Tier 1 Conundrum”

Target Selection

Types of deals:
- The four generic deals
- “In-market” and “out-market” deals
- Post-Enron: “The Race to the Pure”
Types of synergies

Due Diligence

Objectives and purpose
Areas covered
Types of Due Diligence
Linking Due Diligence with value driver analysis
Maximising benefit/cost/time return from acquirer’s viewpoint
Special circumstances
- Public versus private
- Friendly versus hostile
- Voluntary versus mandatory
Tie-in with deal documentation

Deal Structuring

Mergers & Acquisitions

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