June 25, 2010
Private and Public Merger Waves
Maksimovic et al have recently posted a paper, Private and Public Merger Waves, analyzing merger waves. It's not all that surprising that they find public companies are more likely going to be involved in cyclical merger waves than private companies. They suggest that access to capital is the determining factor in the public company's participation. I tend to agree - when firms have access to cheap capital they tend to go overboard. On the other hand, they suggest that acquisitions "on the wave" are more successful. I think there's a host of anecdotal and - if you give me a minute - empirical data that suggests buying at the crest of a merger wave never works out well.
June 24, 2010
More on the Constitutionality of DGCL 203
The May edition of The Business Lawyer just arrived in my inbox. This edition is the proceedings from a recent symposium on the constitutionality of state anti-takeover laws (DGCL 203) in spired by Guhan Subramanian et al's piece, Is Delaware's Antitakeover Statute Unconstitutional? Evidence from 1988-2008. The symposium includes contributions from Eileen Nugent (A Timely Look at DGCL Section 203), A. Gilchrist Sparks (After 22 Years, Section 203 of the DGCL Continues to Give Hostile Bidders a Meaningful Opportunity for Success), Stephen P. Lamb (A Practical Response to Hypothetical Analysis of Section 203's Constitutionality), and Larry Ribstein (Preemption as Micromanagement) among others.
Definitely summer beach reading. Too bad it's not available in a Kindle version!
June 22, 2010
Litigator's Role in M&A
OK, so you're a summer associate or a junior litigation associate in a NY firm. Probably the highest stakes litigation around for your clients may well entail a proposed merger and a challenge to it. Your not uncommon reaction to realizing that most of your litigation work will be focused on corporate related matters may well be - "But, uh, I didn't take corporate law. ... I'm a litigator." If you're a summer associate, don't worry, that's what your 3L year is for. If you happen to have gotten out of law school with taking corporate law or M&A, there's always this: Courtney Rosen's The Litigator's Role in M&A Transactions. It's a quick review (42 pages) of everything a litigator needs to know after getting tossed into litigation over an M&A transaction. It's no substitute for taking an M&A class, but its focus on the process of litigation, including privilege and discovery issues will be useful.
June 21, 2010
Financial Structure of LBOs
Axelson et al have a recent paper, Borrow Cheap, Buy High? The Determinants of Leverage and Pricing in Buyouts, that provides cross-sectional review of LBO structures. The paper reinforces the notion that cheap and readily available credit is the mother's milk of the LBO boom.