CAPITAL IQ

Parvesh Aghi

CAPITAL I Q

Section 2
1)Health Care Property Investors Inc (HCP) to Acquire Slough Estates USA Inc (SEUSA) 2)CASH CONSIDERTION OF 2.9 Billion (Including 1.2 outstanding debt)

3)SEUSA is wholly owned by SEGRO plc publically traded real estate company listed on London stock exchange 4) the acquisition is subject to the approval of the shareholders of SEGRO Plc

5) SEUSA s portfolio is concentrated in the San Francisco 5) HCP has obtained a financing commitment for a 3 billion bridge loan

6)Cohen & Steers Capital Advisors LLC Served as financial advisors to HCP
7) The transaction is expected to close in the third quarter of 2007

ANSWER SECTION 2
Transaction Status (Announced/Closed/Cancelled/Effective)
Announcement date Annouced june 4,2007 third quarter of 2007 2.9 billion Yen SEUSA HCP SEGRO 100% Cohen & Steers Capital Advisors

Closing date Total Deal Value currency involved in transaction Name of the Target Name of the Buyer Name of the Seller
% Acquired by buyer Advisor to Buyer

Section 3
Bally Total Fitness Holding announced that it has successfully emerged from chapter 11 protection as a private company just over two months after filing for bankruptcy protection on July 31 2007. The restructuring arrangements funded by Harbinger Capital Partners Masters Fund and Harbinger Capital Partners special situations Fund. Are now effective

Question/Answers section 3
1)Who are the debtor in the above case ? Ans : Bally Total Holding 2) What role do the lenders play in Bankruptcy process ? Name the Lender mentioned in the case Ans : The debtors involved may propose the repayment and reorganization plan or, the lender may propose a plan as well. Any plan that is created must be approved by the lenders, and if there are multiple plans sometimes the lenders are given the opportunity to vote on the plan that is put into place.
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Lenders :

A) Senior note holders

B) Subordinated note holders 3) Will Bally Total Fitness continue to operate once the bankruptcy process is completed ? Give reasons Ans Yes Bally Total Fitness continue to operate Chapter 11 bankruptcy is allowed when a business needs to restructure the debts it has and reorganize its finances so it can stay open
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Section 4
What Does Series A Financing Mean? The first round of financing undergone for a new business venture after seed capital. Generally, this is the first time that company ownership is offered to external investors. Series A financing, may be provided in the form of preferred stock, and may offer anti-dilution provisions in the event that further financing through preferred or common stock occurs in the future.
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Section 4
Series A financing tends to occur when the company is generating some revenue from its business model, but rarely will the business be generating net profits at this point. Most series A investors will be venture capital funds or angel investors that are willing to accept the high levels of risk found in these early-stage company investments. As an enterprise grows and requires additional capital, the subsequent rounds of preferred stock issued to investors are called Series B, Series C, and so on. This allows investors in those subsequent rounds of financing to know where they stand in the hierarchy of claims to future profits. Typically, the business is revalued before each round of financing, so terms of conversion may be vastly different for different rounds depending on the valuation of the company at each stage.

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SECTION 4
What does GBP stands for Ans : Pound sterling Is it a private placement transaction or a Public offering transaction Ans : Private placement transaction Which company is receiving funds and Which is/are the company(s) that are investing Ans : Cascade Technologies is receiving funds Bank of Scotland/Scottish Executive/ Synergy Fund/ Indviduals
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What is the size/amount of the deal ?

Ans : $ 2 Million Series A financing

For what purpose the funding will be used ? Ans cascade will first offer its detectors for health and saftey sectioning in the oil and gas industries

Later cascade expects to look to enter the health care and defense /security markets fields

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Section 5
As of the effective time of merger , all stock options and warrants to purchase shares of Microsoft common stock will be canceled and the holder of each stock option or warrants with a per share exercise price lower than $8.10 per share merger consideration will be entitled to receive a cash payment to an amount equal to excess if any , of the $ 8.10 per share merger consideration over the exercise price of such option or warrant.

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However, none of the warrants outstanding has per share exercise price lower than the merger consideration , so no payments will be made in respect of any warrants.

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Answer Section 5
$ 1 million options 1.75 million options 3.0 million option 3.0 per share 30,00,000 9.0 per share 15,75,000 1.75 Million 6.0 per share 180,00,000 Cash payment $ shares

3.0 million warrants

10 per share
3.0 million

2,25,75,000
225.75 Million

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Section 5 part 2
GIGA Inc acquired Alpha .com on October 15, 2005 for $125 million . GIGA offered to pay $ 4 for each of the 20 million Alpha shares , alongside $5 for each of the 9 million Class A Alpha preference shares Who is the Target and Acquirer ? What is the total amount paid by the acquirer for the target common shares. ? What is /are target security(s)
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Answer
Alpha shares Class A Alpha preference shares

Number of shares
2000000

$ 4

Amount 8000000

900000

4500000

12500000
TARGET ACQUIRER Amount paid for the common shares Target securities ALPHA GIGA

$ 80 Million Common shares Class A preference shares

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SECTION 1

What is the difference between acquisition as a subsidiary and an acquisition ?

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HOLDING and SUBSIDARY COMPANY

Sec 4 of the Companies Act, 1956 defines holding and subsidiary company. With reference to this, holding company is the one which acquires controlling interest in another company by (1) acquiring more than 50% of equity capital, (2) having such powers which enables it to appoint or remove majority directors on other company's board,

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or (3) acquiring holding company of another company through one of the two modes above. Hence holding company is the controlling company whereas subsidiary company is the controlled company. But legally both are separate entities and in practical may just operate separately even in different lines of business.

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Acquisitions and Takeovers

An acquisition may be defined as an act of acquiring effective control by one company over assets or management of another company without any combination of companies.

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Acquisitions and Takeovers

Thus, in an acquisition two or more companies may remain independent, separate legal entities, but there may be a change in control of the companies.

When an acquisition is 'forced' or 'unwilling', it is called a takeover. In an unwilling acquisition, the management of 'target' company would oppose a move of being taken over. But, when managements of acquiring and target companies mutually and willingly agree for the takeover, it is called acquisition or friendly takeover.

Question 2

Defense against hostile takeover

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White knight
When a corporation is the target of an unwanted bid or threat of bid from a potential acquirer , it may seek the aid of a white knight A potential acquirer who is sought out by a target company's management to take over the company to avoid a hostile takeover by an undesirable black knight

Buy back shares

Such share purchase can have several advantages for a target corporation : Share repurchases can divert shares away from hostile bidder

Share buy backs

In a share buyback program, the company distributes the excess cash flow among the shareholders. The shareholders get an exit opportunity at a premium price (in most cases) over the prevailing market price, while the company gets an opportunity to reduce its equity capital liability.

Some of the prominent reasons of share buyback are boosting market perception, showing rosier financials, benefitting from tax gains and increasing the promoter's stake if the share price is low
Another motive for stock repurchase is to protect the company against a takeover threat.

What is an open offer/Tender offer

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The main features of the new code are : applicable w.e.f 23/10/2011 The main change in the new takeover code is that the trigger for making an open offer has been raised from 15 percent to 25 percent. A company can now invest upto 25 percent in another company without making an open offer. Sebi has also raised the open offer size, once the takeover code is triggered, to 26 percent from 20 percent earlier, thus offering an easy exit for investors. Earlier the open offer size was limited to 20 percent which meant shareholders offering their stakes for purchase would often get only partial acceptance. The acquirer would also end up with a sub-optimal stake.

 The offer price shall be the highest of : 1. Negotiated price between acquires and the shareholder of the target company.

2. Highest Price paid by the acquirer for acquisition of shares by way of allotment in public rights or preferential issue during the 26-week period prior to the date of the PA 3. Average of weekly high & low of the closing prices of shares as quoted on the Stock exchanges, during 26 weeks prior to the date of the Public Announcement

4. In case the shares of the target company are not actively traded , fundamentals such as book value , EPS , RONW , industry average needs to be considered