M&A: Key Terms

Listed Companies

Group of board members responsible for overseeing finance reporting, risk management etc.

Group of board members responsible for setting salaries and other compensation

Group of board members responsible for examining the characteristics required of board members

Compulsory sale of shares of minority shareholders of a joint stock company

Initial Public Offerings

Contract between a corporation issuing new securities and a group that agrees to buy and sell for a profit

Capital Market Transactions

Offer of selling own shares in exchange for target's shares

Issuance of new shares to finance new investments or acquisitions

Security that entitles holder to buy or sell stock

Issue of rights to existing shareholders to allow them to buy additional shares

Allows shareholders allow them to buy shares at a lower than market value price

Capital equity market offering, offer shares in short period of time with little to no marketing

Sell securities to a small number of accredited investors

Acquisition Finance

The most common form of debt lending in the credit market and holds the most significant share of the market.

Debt that is unsecured and is lower on the debt hierarchy than other debt claims (subordinated)

The result of a hybrid debt issue being subordinated to another debt issue from the same issuer

A hybrid financing structure that combines elements of traditional senior and subordinated debt into a single debt facility

A series of mechanisms that aim to “push down” a portion of the borrowing taken on by the buyer of a company

Shareholder Agreements

Option granted by a seller to a buyer to purchase a target company’s stock as a prelude to a takeover

What right is it known as when transfer requires prior approval

Shares are only transferred after beneficiary of the this right is given the opportunity to buy

when a majority shareholder sells their stake, ensuring they can exit on the same terms/ minority shareholders brought into a sale, potentially against their wishes.

Right to sell/ buy

Loan that is paid back all at once

Loan that is paid back over time

New entity formed to affect a business combination

The entity that operates the business being acquired

A firm that exercises control over one or more additional firm(s)

Document containing amount/ interest rate, governing law of debt

Letter that contains the commitment of the bank to finance an acquisition

Legal document that helps to facilitate the transfer of property, such as land, from one individual or entity to another