Revlon Rule
What is the Revlon Rule? The Revlon Rule addresses conflicts of interest where the interests of the board of directors conflict with their fiduciary duty. Specifically, the Revlon Rule arose out of a hostile takeover. Prior to the takeover itself, the duty of the board of directors is to protect the company against the takeover....
Business Exit Strategy
What is a Business Exit Strategy? A business exit strategy is a plan for the transition of business ownership either to another company or investors. Even if an entrepreneur is enjoying good proceeds from his firm, there may come a time when he wants to leave and venture into something different. When such time comes,...
Deal Fatigue
What is Deal Fatigue? Deal fatigue refers to a condition during negotiations where parties on either side of the negotiation begin to feel frustrated, helpless, or exhausted by the seemingly unending negotiation process. Sometimes, members of negotiating teams tend to experience the feeling of giving up due to the failure to reach a consensus. Deal...
Asset Deal
What is an Asset Deal? An asset deal occurs when a buyer is interested in purchasing the operating assets of a business instead of stock shares. It is a type of M&A transaction. In these cases, the buyer completes the transaction by providing the selling company consideration for some or all of the assets they...
Data Room
What is a Data Room? A data room is a secure place that is used to store privileged data, usually for legal proceedings or mergers and acquisitions transactions. Data rooms are used for storing documents, file sharing, securing sensitive documents, and conducting financial transactions. There are two types of data rooms: physical data rooms and...
363 Sale
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...
Asset Purchase vs Stock Purchase
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...
Types of Mergers
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...
Teaser
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...
White Squire
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...
