MERGERS AND ACQUISITIONS – Fareast Vencap

MERGERS AND ACQUISITIONS

Fareast Vencap

MERGERS AND ACQUISITIONS

Introduction to M&A

We advise bidders, targets and advisers on private/public company takeovers and mergers and the associated legal, regulatory and practical considerations.

In past years, management buyouts have changed from a little known approach to equity investing to a mainstream type of corporate finance. The governance principles of our buyouts for example, aligning the interests of owners and managers, have become corporate paramount best practice in the Peoples Republic of China. The economic and community value of private equity has been documented by academics and others.

Although much has changed in the market for buyouts, mergers and acquisitions and takeovers in the Peoples Republic of China, and the way we manage our business and investments, Far East Chrome Ventures Limited has maintained a focus on the nucleus of our philosophy: investing substantial capital to acquire a controlling stake in an industry leading company, one with a sustainable spirited advantage and one in which our participation will enhance the creation of wealth.

By far the most frequent form of takeover is an offer by the bidder to acquire all the shares in the target company. However, it is also possible for a recommended takeover or merger (though not a hostile one) to proceed as a statutory scheme of arrangement under the Companies Act and this should be considered in the appropriate circumstances. As well as shareholder approval, such a scheme requires a court order and although it is typically more protracted and costly it does have a number of advantages. The key advantage is that with a vote in favor of the proposals by the holders of 51% of the target shares (counting only those who actually attend the meeting) and the court’s approval, it is possible to secure 100% of the shares. This compares favorably with the thresholds on a takeover offer and may be particularly important where there is one large shareholder who may prove difficult or many small shareholders who will not bother to accept an offer or turn up at the meeting.