What is a 363 Sale? A 363 Sale refers to the sale of an organization’s assets under Section 363 of the US Bankruptcy Code. The sale enables debtors to fulfill their obligations to creditors by selling their assets and using the funds collected to settle their debts. The purchasers of the assets benefit from the…
What is a Bailout Takeover? A bailout takeover refers to a scenario where the government or a financially stable company takes over control of a weak company with the goal of helping the latter regain its financial strength. The acquiring entity takes over the weak company, usually by means of purchasing a controlling amount of…
What is Covered Interest Rate Parity (CIRP)? Covered interest rate parity (CIRP) is a theoretical financial condition that defines the relationship between interest rates and the spot and forward currency rates of two countries. It establishes the fact that there is no opportunity for arbitrage using forward contracts, which are often used to make loose…
What is the Uncovered Interest Rate Parity (UIRP)? The Uncovered Interest Rate Parity (UIRP) is a financial theory that postulates that the difference in the nominal interest rates between two countries is equal to the relative changes in the foreign exchange rate over the same time period. It is quite similar to an economic theory…
What is FX Carry Trade? FX carry trade, also known as currency carry trade, is a financial strategy whereby the currency with the higher interest rate is used to fund trade with a low yielding currency. Using the FX carry trade strategy, a trader aims to capture the benefits of risk-free profit-making by using the…
Asset Purchase vs Stock Purchase When buying or selling a business, the owners and investors have a choice: the transaction can be a purchase and sale of assets or a purchase and sale of common stock. The buyer of the assets or stock (the “Acquirer”) and the seller of the business (the “Target”) can have…
What is a Merger? A merger refers to an agreement in which two companies join together to form one company. In other words, a merger is the combination of two companies into a single legal entity. In this article, we will look at different types of mergers that companies can undergo. Types of Mergers There…
What is an Investment Teaser? An investment teaser is a one or two-slide summary of a potential sale process without mentioning the name of the potential target company, in order to maintain the company’s identity as confidential. A teaser should include the unique selling points of the company while ensuring that the value of the business…
What is a White Squire? A white squire is an individual or company that buys a large enough stake in the target company to prevent that company from being taken over by a black knight. In other words, a white squire purchases enough shares in a target company to prevent a hostile takeover. Learn more…
What is a Public Information Book (PIB)? A Public Information Book (PIB) is a document that compiles available public information on a specific company. Generally, it contains information from the company’s latest annual report, equity research reports, industry information, news articles, and recent quarterly earnings webcasts or conference calls. A PIB is very helpful when performing…
