EGTL Takeover Process - Operations

Total Page:16

File Type:pdf, Size:1020Kb

EGTL Takeover Process - Operations JOB AID EGTL Takeover Process - Operations DISCLAIMER: The information contained in this document is the property of Allstate Insurance Company. This document is for use by Allstate employees only. Any duplication or modification of its content is strictly prohibited. Always confirm you have the most current version of this document by visiting the authenticated content repository that supports your area. PURPOSE: Explains the process and workflows for handling EGTL takeovers EGTL Takeover Basics EGTL takeover happens when EGTL is sold to an account with an existing group life plan that is to be discontinued when Allstate Benefits issues EGTL coverage. The following general rules apply: • Target groups have 25+ full-time, active eligible W2 employees legally working and residing in the United States • Allstate Benefits contracts do not cover contract (1099) employees • EGTL is approved for employers covering their W2 employees. EGTL is not approved for associations, unions or other membership organizations Grandfathering When we take over a plan that was insured by another carrier, we are often asked to waive Evidence of Insurability (EOI) for employees or spouses who had volumes outside our Guarantee Issue limitations under the prior contract. This is called “grandfathering.” Grandfathering is an Underwriting function. Underwriting reviews the current enrollment to see if anyone falls outside the Guarantee Issue (GI) limits described in the proposal. All requests for grandfathering must be submitted to the GENELCO Underwriting team for consideration and follow the requirements below: • Submit a copy of the proposal as well as a copy of the current enrollment under the prior carrier • Include the required data elements as outlined in Step 1 of this job aid • Enrollment should be submitted as an Excel spreadsheet or, for groups with fewer than 100 enrolled employees, the underwriter can work from a PDF of a recent bill Allstate Benefits may accept some, but not all, grandfathering situations, so negotiation should happen during the proposal process. Potential obstacles for grandfathering include, but are not limited to: • Employees insured for an amount greater than the GI limit offered in the AB proposal • Employees insured for amount greater than three times their annual earnings • Spouse benefits that exceed 50% of the employee benefit • Spouse benefits that exceed the maximum amount stated in the AB proposal Revised 9/18/2017 Page 1 of 11 EGTL Takeover Process - Operations JOB AID EGTL Takeover Process - Operations EGTL Enrollment Specifics • Passive Enrollment/Rollover In a Passive Enrollment, employees are enrolled under the Allstate Benefits contract with the same volume they had under the prior contract. This method works if all coverages are under the GI limit or if grandfathering is approved by Underwriting o Passive Rollover is often used when AB takes over an employer-paid plan where the current benefits are the same that AB is offering o Passive Rollover is possible with a voluntary plan only if AB takes over the contract prior to the group’s open enrollment date o Passive Enrollments cannot be used with groups sitused in Florida, Kentucky, Louisiana, Missouri, Montana, North Carolina, New Hampshire or Virginia due to state requirements • Active Enrollment In an Active Enrollment, all employees, currently enrolled or not, make an active coverage choice o If grandfathering is approved by Underwriting, employees with prior carrier coverage will be grandfathered for Guaranteed Issue up to the limit set by Underwriting • Mix (Passive/Active) In a Mixed Enrollment, employees are given the option of choosing new coverage or rolling over existing coverage levels to the new group policy EGTL Process Flow Revised 9/18/2017 Page 2 of 11 EGTL Takeover Process - Operations JOB AID EGTL Takeover Process - Operations Sales Team 1. The sales team submits a quote request via AIM All required documentation must be uploaded to the Documents tab of the Opportunity Verify the return email address in AIM is where the quote should be delivered The enrollment engagement level must be established and communicated with the Underwriting request Determine if the request is for New or Takeover Business: • If the request is for voluntary Life and the employer does not currently have voluntary Life, the request is considered New Business • If the employer has a voluntary Life plan, the request is considered a Takeover • Voluntary Life and employer-paid Life are treated as different products when determining if the request is for New or Takeover business, even though both are Group Term Life products. If you are requesting a voluntary Life plan and the employer currently has no voluntary Life plan, the request is considered as New Business, although the employer may have an employer-paid Life plan Include the following information in your quote request: For New Business 1. The corporate name and address of the employer to be quoted 2. The agent’s name as you want it to appear on the proposal 3. The commission percentage to be included 4. A description of the benefits to be provided 5. The requested effective date of coverage 6. The date the proposal is due back to the requestor 7. A census of the eligible group, including: - Gender - Date of Birth or Age - Volume of insurance - If benefits vary between classes, census must show each employee’s class For Takeover Business • Takeover groups with fewer than 500 eligible employees 1. Provide the same information required for new business (above) 2. Provide a copy of the current contract and/or certificate • Takeover groups with 500 to 1,000 eligible employees 1. Provide the same information required for new business (above) 2. Provide a copy of the current contract and/or certificate 3. Provide experience for the last 3-5 years (not required, but yields better rates) • Takeover groups with 1,000+ eligible employees 1. Provide the same information required for new business (above) 2. Provide a copy of the current contract and/or certificate 3. Provide experience for the last 3-5 years (required for groups larger than 1,000 eligible lives) Revised 9/18/2017 Page 3 of 11 EGTL Takeover Process - Operations JOB AID EGTL Takeover Process - Operations For Takeover Business with Grandfathering 1. Provide the same information required for takeover business (above) 2. Provide an electronic version of the current carrier’s bill that includes: - Itemized deductions for each employee currently enrolled in group voluntary term Life coverage - First and last name of employee - Gender of employee - Coverage amounts for each employee and dependent(s) Experience Experience information is helpful to Underwriting on groups of 500+ employees, but is required for groups of 1,000+ employees. Experience includes: • Three to five years of paid premiums. Show separate premiums for: o Employer-paid Life o Voluntary Life o AD&D Premium reports provided by incumbent carriers are typically broken out this way • Three to Five years of paid claims. Show separate claims experience for: o Employer-paid Life o Voluntary Life o AD&D • Provide current rates for: o Employer-paid Life o Employer-paid AD&D o Voluntary Life o Voluntary AD&D If the rates have changed in the past three years, Underwriting requires the effective date of the rate change as well as the prior rate information • Include a Disabled Lives Census showing all employees currently insured under the group Life plan that are not actively at work. Include: o Name o Gender o Date of Birth o Volume of insurance o Diagnosis or reason for not being actively at work Revised 9/18/2017 Page 4 of 11 EGTL Takeover Process - Operations JOB AID EGTL Takeover Process - Operations Underwriting 2. Underwriting completes the quote/proposal and returns it to the original submitter • The Quote/Proposal needs to include the takeover maximum if grandfathering is approved • Rate appeals are submitted in AIM and require a two-day turnaround Turnaround Times for Underwriting Proposals • Groups with 25 – 499 eligible lives: ... 2 business days after receipt of all necessary information • Groups with 500 – 999 eligible lives: . 2 - 3 business days after receipt of all necessary information • Groups with 1,000+ eligible lives: ....... 3 - 5 business days after receipt of all necessary information Sales Team 3. Requester reviews and provides the proposal to the sales lead (if sales lead is not the requester) NOTE: If the client is a National Account, the National Account team adds the proposal to the Proposal package, which includes a cover letter from the sales lead as well as the proposals for any other products requested Turnaround Times for National Accounts Implementation Teams • Standard proposal: ...... 2 business days after all necessary information received • Custom proposal: ........ 5 business days after all necessary information received • Standard RFP: .............. 3 - 5 business days after all necessary information received • Non-Standard RFP: ...... 5 - 7 business days after all necessary information received • Complex RFP: .............. 7 - 10 business days after all necessary information received NOTE: Turnaround times for National Accounts team are based on the date requests are received and include time for Underwriting to deliver the proposal (Step 1, above) 4. Sales lead presents the proposal to the client 5. When the client accepts the proposal, the sales team sends the initial Sold Case notification via AIM to the Home Office and includes: • The completed and
Recommended publications
  • Adopting a Poison Pill in Response to Shareholder Activism
    IN THE BOARDROOM CAPITAL MARKETS & CORPORATE GOVERNANCE Ismagilov/Shutterstock.com Adopting a Poison Pill in Response to Shareholder Activism In his regular column, Frank Aquila drafts a memo to a board explaining the considerations it should evaluate when deciding whether to adopt a poison pill. FRANCIS J. AQUILA PARTNER SULLIVAN & CROMWELL LLP Frank has a broad multidisciplinary practice that includes extensive experience in negotiated and unsolicited mergers and acquisitions, activist and takeover defense, complex cross-border transactions, global joint ventures, and private equity transactions. He regularly counsels boards of directors and board committees on corporate governance matters and crisis management. MEMORANDUM TO: The Board of Directors FROM: Frank Aquila RE: Considerations When Adopting a Poison Pill in Response to Shareholder Activism As we have discussed, the Investor has just filed a Schedule 13D with the Securities and Exchange Commission disclosing equity holdings in the Company equal to 8.8% of the Company’s common stock. The Investor has also disclosed its intentions to increase its stake to approximately 15%, seek representation on the Company’s Board, and then advocate for either a spin-off of certain business units or a sale of the Company. 22 April 2016 | Practical Law © 2016 Thomson Reuters. All rights reserved. To strengthen the Board’s negotiating leverage and provide adequate time to evaluate what alternatives would be in the best interests of the Company and its shareholders, the Board is considering adopting a shareholder rights plan, commonly known as a poison pill, with a 10% threshold. Correctly implemented, the triggering of this poison pill would massively dilute the Investor’s voting and equity stake as soon as the Investor acquires 10% of the Company’s outstanding common stock by allowing all other shareholders to purchase additional shares at a steep discount.
    [Show full text]
  • 1 IRREVOCABLE SUBSCRIPTION UNDERTAKING TO: Tryg A/S
    EXECUTION VERSION IRREVOCABLE SUBSCRIPTION UNDERTAKING TO: Tryg A/S Klausdalsbrovej 601 2670 Ballerup Denmark ("Tryg") and Morgan Stanley & Co. International plc 25 Cabot Square Canary Wharf London E14 4QA United Kingdom ("Morgan Stanley") and Danske Bank A/S Holmens Kanal 2 - 12 DK-1092 Copenhagen Denmark ("Danske Bank" and together with Morgan Stanley, the "Underwriters") FROM: TryghedsGruppen SMBA Hummeltoftevej 49 2830 Virum Denmark (the "Foundation", "us", "we") Date: 18 November 2020 1 RECOMMENDED CASH OFFER TO ACQUIRE RSA INSURANCE GROUP PLC AND RIGHTS ISSUE IN TRYG A/S 1.1 We understand that Tryg together with Regent Bidco Limited (“Bidco”) and Intact Financial Corporation ("Intact") contemplate an acquisition by Bidco of the entire issued and to be issued share capital of RSA Insurance Group plc ("RSA") (the "Acquisition") by way of court-sanctioned scheme of arrangement under Part 26 of the UK Companies Act 2006 (including any new, increased, renewed or revised scheme of arrangement) (the ''Scheme''). In connection with the Acquisition, 1 Intact and Tryg have entered into a Separation Agreement with respect to the Scandinavia Sepa- ration, on the terms and conditions as summarised in the draft announcement attached to this irrevocable undertaking as Appendix 1.1 (the ''Rule 2.7 Announcement''), together with such additional terms and conditions as may be required by the Applicable Requirements (as defined in Clause 1.3 below) or as may be agreed in writing between Tryg, Intact, Bidco and RSA provided that such additional terms shall not increase Foundation's payment obligations under this irrevoca- ble undertaking or change the consideration contributed by Tryg to the Acquisition as indicated in the Rule 2.7 Announcement without the Foundation's prior consent.
    [Show full text]
  • The SEC and the Failure of Federal, Takeover Regulation
    Florida State University Law Review Volume 34 Issue 2 Article 2 2007 The SEC and the Failure of Federal, Takeover Regulation Steven M. Davidoff a@k.com Follow this and additional works at: https://ir.law.fsu.edu/lr Part of the Law Commons Recommended Citation Steven M. Davidoff, The SEC and the Failure of Federal, Takeover Regulation, 34 Fla. St. U. L. Rev. (2007) . https://ir.law.fsu.edu/lr/vol34/iss2/2 This Article is brought to you for free and open access by Scholarship Repository. It has been accepted for inclusion in Florida State University Law Review by an authorized editor of Scholarship Repository. For more information, please contact efarrell@law.fsu.edu. FLORIDA STATE UNIVERSITY LAW REVIEW THE SEC AND THE FAILURE OF FEDERAL TAKEOVER REGULATION Steven M. Davidoff VOLUME 34 WINTER 2007 NUMBER 2 Recommended citation: Steven M. Davidoff, The SEC and the Failure of Federal Takeover Regulation, 34 FLA. ST. U. L. REV. 211 (2007). THE SEC AND THE FAILURE OF FEDERAL TAKEOVER REGULATION STEVEN M. DAVIDOFF* I. INTRODUCTION.................................................................................................. 211 II. THE GOLDEN AGE OF FEDERAL TAKEOVER REGULATION.................................. 215 A. The Williams Act (the 1960s) ..................................................................... 215 B. Going-Privates (the 1970s)......................................................................... 219 C. Hostile Takeovers (the 1980s)..................................................................... 224 1. SEC Legislative
    [Show full text]
  • Investor Bulletin: Reverse Mergers
    e Investor Bulletin: Reverse Mergers Introduction merger surviving public company are primarily, if not solely, those of the former private operating company. Many private companies, including some whose operations are located in foreign countries, seek to ac- cess the U.S. capital markets by merging with existing Why Pursue a Reverse Merger? public companies. These transactions are commonly referred to as “reverse mergers” or “reverse takeovers A private operating company may pursue a reverse (RTOs).” merger in order to facilitate its access to the capi- tal markets, including the liquidity that comes with having its stock quoted on a market or listed on an What is a Reverse Merger? exchange. Private operating companies generally have access only to private forms of equity, while public In a reverse merger transaction, an existing public companies potentially have access to funding from a “shell company,” which is a public reporting company broader pool of public investors. A reverse merger with few or no operations,1 acquires a private oper- often is perceived to be a quicker and cheaper method ating company—usually one that is seeking access of “going public” than an initial public offering (IPO). to funding in the U.S. capital markets. Typically, the The legal and accounting fees associated with a reverse shareholders of the private operating company ex- merger tend to be lower than for an IPO. And while change their shares for a large majority of the shares the public shell company is required to report the of the public company. Although the public shell reverse merger in a Form 8-K filing with the SEC, company survives the merger, the private operating there are no registration requirements under the company’s shareholders gain a controlling interest in Securities Act of 1933 as there would be for an IPO.
    [Show full text]
  • A Theory of Merger-Driven Ipos
    JOURNAL OF FINANCIAL AND QUANTITATIVE ANALYSIS Vol. 46, No. 5, Oct. 2011, pp. 1367–1405 COPYRIGHT 2011, MICHAEL G. FOSTER SCHOOL OF BUSINESS, UNIVERSITY OF WASHINGTON, SEATTLE, WA 98195 doi:10.1017/S0022109011000421 A Theory of Merger-Driven IPOs Jim Hsieh, Evgeny Lyandres, and Alexei Zhdanov∗ Abstract We propose a model that links a firm’s decision to go public with its subsequent takeover strategy. A private bidder does not know a firm’s true valuation, which affects its gain from a potential takeover. Consequently, a private bidder pursues a suboptimal restructur- ing policy. An alternative route is to complete an initial public offering (IPO) first. An IPO reduces valuation uncertainty, leading to a more efficient acquisition strategy, therefore enhancing firm value. We calibrate the model using data on IPOs and mergers and acqui- sitions (M&As). The resulting comparative statics generate several novel qualitative and quantitative predictions, which complement the predictions of other theories linking IPOs and M&As. For example, the time it takes a newly public firm to attempt an acquisition of another firm is expected to increase in the degree of valuation uncertainty prior to the firm’s IPO and in the cost of going public, and it is expected to decrease in the valuation surprise realized at the time of the IPO. We find strong empirical support for the model’s predictions. I. Introduction Recent empirical studies suggest that firms’ initial public offerings (IPOs) and mergers and acquisitions (M&As) are not unrelated. According to a survey of ∗Hsieh, jhsieh@gmu.edu, School of Management, George Mason University, 4400 University Dr., Fairfax, VA 22030; Lyandres, lyandres@bu.edu, School of Management, Boston University, 595 Commonwealth Ave., Boston, MA 02445; and Zhdanov, azhdanov@unil.ch, University of Lausanne, Extranef 237, Lausanne 1007, Switzerland and Swiss Finance Institute.
    [Show full text]
  • Accounting Quality, Corporate Acquisition, and Financing Decisions*
    Accounting Quality, Corporate Acquisition, and Financing Decisions* Sangwan Kim Kenan-Flagler Business School University of North Carolina at Chapel Hill 300 Kenan Center Drive, Campus Box 3490, McColl Building Chapel Hill, NC 27599 Sangwan_Kim@unc.edu January 2013 Abstract This paper examines the extent to which the quality of financial accounting information disciplines manager interests to align with stockholder interests in corporate acquisition and financing decisions. I find that, after controlling for financing constraints, recent performance, and payout policy, the tendency of firm managers to time the market is significantly constrained for firms with high-quality financial accounting information. Further, I find that the disciplining impact of accounting information is mostly driven by firms that bid for acquisitions financed with stock issuance. I also provide corroborating evidence by examining a similar disciplining role of financial accounting information in the seasoned public offering markets. I find no such effect for potential acquisitions financed through cash. The evidence suggests that high-quality accounting information allows stockholders to discipline firm managers that are motivated to take advantage of the misevaluation. Further, the results suggest the effectiveness of accounting information as a control mechanism is pronounced for firms that pursue more value-decreasing investment projects. JEL Classification: G02, G32, G34, M41 Keywords: Accounting quality, corporate governance, market timing, mergers and
    [Show full text]
  • Public and Private Takeover Markets: an Empirical Analysis
    PUBLIC AND PRIVATE TAKEOVER MARKETS: AN EMPIRICAL ANALYSIS by MICHAEL A. STEGEMOLLER (Under the direction of Annette B. Poulsen) ABSTRACT An unparalleled $2.7 trillion worth of merger and acquisition activity occurred in the 1990s. These mergers resulted in the combination of firms that were able to combine rapidly changing technologies in new ways. Despite the large amount of merger activity in this period, there is relatively little research studying these mergers and the financial markets that facilitated them. My research addresses the following basic questions about takeovers. The first is whether mergers and acquisitions facilitate economic growth, and the second examines why private firms sell-out to public companies instead of undertaking an initial public offering. I find that acquisitions create tremendous value for those firms utilizing them as a means of corporate change. Frequent acquirers outperform non-frequent acquirers using both economic and accounting measures of performance. Additionally, the level of over-performance is positively influenced by the relative size of the acquisition program of the acquirer. I also examine the transition from private to public ownership by private owners selling their business to a public corporation. I compare these transactions to initial public offerings to better compare the characteristics that influence the decision to be acquired versus “go public.” My results suggest that private firms seeking to transition to public ownership choose an acquisition as the means of transition based on firm-specific characteristics such as growth rates, insider ownership, leverage, and profitability. INDEX WORDS: Takeovers, Mergers, Acquisitions, Long-run performance, Private, IPO, Corporate governance, Ownership PUBLIC AND PRIVATE TAKEOVER MARKETS: AN EMPIRICAL ANALYSIS by MICHAEL A.
    [Show full text]
  • Abstract the Effect of Takeovers on Shareholder Value
    Abstract The Effect of Takeovers on Shareholder Value This study uses a comprehensive sample of tender offers from 1963-97 to estimate aver- age value improvements from takeover as perceived by investors. We estimate value effects using conventional announcement-period abnormal returns, and with two new approaches: the probability scaling method, based on rescaling of short-window returns; and the interven- tion method, which uses returns associated with the announcement of a competing bid. The new methods evade the estimation dilemma of either including only a partial estimate of the value effect of the transaction, or using long post-announcement windows that introduce severe execution date, noise and benchmark error. The intervention method further escapes a bidder-revelation bias present using traditional methods. We find that investors perceive value improvements from tender offers on average to be large and positive (about 50% of target value). We also examine the economic determinants (means of payment, hostility of the bid, focusing versus diversifying transactions, regulatory environment, relative bid- der/target sizes) of the value improvements and revelation biases in different transactions. Numerous papers have studied the stock market valuation effects of takeovers. It would therefore be reasonable to expect the question of how much takeovers improve firm value to be as fully resolved as standard databases permit. Building on this previous work, this paper offers new methods of estimating shareholder value improvements from takeover. The resulting estimates are much larger than those implied by traditional methods. There are two important challenges to estimating value effects of takeovers. We call the first challenge the dilemma of window length.
    [Show full text]
  • Takeover Law and Practice Guide 2020
    Wachtell, Lipton, Rosen & Katz Takeover Law and Practice 2020 This outline describes certain aspects of the current legal and economic environment relating to takeovers, including mergers and acquisitions and tender offers. The outline topics include a discussion of directors’ fiduciary duties in managing a company’s affairs and considering major transactions, key aspects of the deal-making process, mechanisms for protecting a preferred transaction and increasing deal certainty, advance takeover preparedness and responding to hostile offers, structural alternatives and cross-border transactions. Particular focus is placed on recent case law and developments in takeovers. This edition reflects developments through September 2020. © October 2020 Wachtell, Lipton, Rosen & Katz All rights reserved. Takeover Law and Practice TABLE OF CONTENTS Page I. Current Developments ..............................................................................1 A. Overview ............................................................................. 1 B. M&A Trends and Developments ........................................ 2 1. Deal Activity ........................................................... 2 2. Unsolicited M&A.................................................... 4 3. Private Equity Trends ............................................. 5 4. SPAC Trends .......................................................... 6 5. Acquisition Financing ............................................. 8 6. Shareholder Litigation ...........................................
    [Show full text]
  • Simply BUYOUT a Guide to Employee Buyouts and Becoming an Employee Owned Business Simply Buyout: a Guide to Employee Buyouts and Becoming an Employee Owned Business
    Simply BUYOUT A guide to employee buyouts and becoming an employee owned business Simply Buyout: A guide to employee buyouts and becoming an employee owned business Foreword Employee ownership is high on the business and economic agenda and for good reason. Where a business is owned by its workforce, everyone has a stake in success. e longevity of companies with employee ownership is impressive. eir productivity is undoubted. A good number see employee ownership as complex. It need not be. e company can be much like any other company. What is different is how it is owned. Co-operative models are a welcome part of the employee ownership landscape here and abroad. ere are many leading employee owned businesses that can be classified as co-operatives under accepted international definitions. I have helped to advise and form many myself. Co-operative forms of employee ownership help to underpin an active role for employees in terms of governance and accountability. e review I conducted for the Government on employee ownership, which reported in 2012, concluded that clear advice and information is now a Graeme Nuttall key requirement, particularly at the point of business Partner, Field Fisher Waterhouse LLP succession and transfer. I warmly welcome this guide and author of Sharing Success: e Nuttall as key to this and wish you the best for using it. Review of Employee Ownership . Simply Buyout: A guide to employee buyouts and becoming an employee owned business Contents Introduction .................................................................................................................................................................................... 2 Who this guide is for and what it hopes to achieve ............................................................................................................... 2 How to use this guide ......................................................................................................................................................................
    [Show full text]
  • Mergers and Acquisitions and Corporate Governance 199
    1 2 3 4 5 MERGERS AND ACQUISITIONS AND 6 7 CORPORATE GOVERNANCE 8 9 10 Anant K. Sundaram 11 12 13 Ever since Professor Henry Manne coined the phrase “the market for corporate 14 control” in 1965, the phenomenon of mergers & acquisitions (M&A) has been 1 15 closely associated with corporate governance. In his article, Manne (1965, 16 p. 113) developed a straightforward argument that, by hindsight, seems obvious: 17 “The lower the stock price, relative to what it could be with more efficient 18 management, the more attractive the takeover becomes to those who believe that 19 they can manage the company more efficiently. And the potential return from the 20 successful takeover and revitalization of poorly run company can be enormous.” 21 Thus was the born that notion that in economies with active markets for corporate 22 control, shareholders of poorly governed companies will sell, thereby lowering 23 share prices in the financial marketplace, with the lower prices creating the 24 incentive for outsiders to accumulate control rights, replace the incumbents, and 25 restructure the firm to create value for themselves. 26 Thus was also born the study of the links among takeovers, corporate gov- 27 ernance, and firm performance. In the process, these links have come to be 28 among the most extensively researched topics in the fields of finance and strategic 29 management. Masterful summaries of this research chronicle evidence from the 30 1970s (Jensen & Ruback, 1983), the 1980s (Jarrell, Brickley & Netter, 1988), 31 and the 1990s (Andrade, Mitchell & Stafford, 2001), revealing a few recurrent 2 32 and compelling themes that are now accepted as conventional wisdom: On 33 average, target shareholders gain, while acquirer shareholders break even (they 34 may even lose slightly); the ability to capture takeover gains remain elusive, and 35 36 37 Advances in Mergers and Acquisitions 38 Advances in Mergers and Acquisitions, Volume 3, 197–223 Copyright © 2004 by Elsevier Ltd.
    [Show full text]
  • The Corporate Takeover Market Common Takeover Tactics, Antitakeover Defenses, and Corporate Governance
    CHAPTER 3 The Corporate Takeover Market Common Takeover Tactics, Antitakeover Defenses, and Corporate Governance Treat a person as he is, and he will remain as he is. Treat him as he could be, and he will become what he should be. —Jimmy Johnson INSIDE M&A: KRAFT SWEETENS ITS OFFER TO OVERCOME CADBURY’S RESISTANCE Despite speculation that offers from U.S.-based candy company Hershey and the Italian confectioner Ferreiro would be forthcoming, Kraft’s bid on January 19, 2010, was accepted unanimously by Cadbury’s board of directors. Kraft, the world’s second (after Nestle´) largest food manufacturer (after Nestle´) , raised its offer over its initial September 7, 2009, bid to $19.5 billion to win over the board of the world’s second largest candy and chocolate maker. Kraft also assumed responsibility for $9.5 billion of Cadbury’s debt. Kraft’s initial bid evoked a raucous response from Cadbury’s chairman Roger Carr, who derided the offer that valued Cadbury at $16.7 billion as showing contempt for his firm’s well- known brand, and dismissed the hostile bidder as a low-growth conglomerate. Immediately following the Kraft announcement, Cadbury’s share price rose by 45% (7 percentage points more than the 38% premium implicit in the Kraft offer). The share prices of other food man- ufacturers also rose due to speculation that they could become takeover targets. The ensuing four-month struggle between the two firms was reminiscent of the highly publicized takeover of U.S. icon Anheuser-Busch in 2008 by Belgian brewer InBev.
    [Show full text]