[Ipg-smz] Asymmetrical Mergers
Tom Henderson
thenderson at extremelabs.com
Wed Oct 23 15:03:40 UTC 2019
No, although some reverse mergers are between public/private organizations.
Differential valuations sometimes have to do with stock locks, stupid
warrant tricks, cross-covenants, all kinds of shenanigans.
The very phrase "merger" is fraught with differing definitions. On the
top, two companies combine assets. Underneath, how those assets are
combined, depreciation(s), tax angles, countries/areas of jurisdiction,
legal rulings, subsidiary bulk asset transfers, all these and more have
a bearing on the perceived outcome by the people pulling the strings.
Those same people orchestrate this for THEIR benefit, as
stockholders/officers/happy-benefactors. Nothing less, nothing more.
The previous citations here explain examples of it. Always look to the
principal's outcomes for the rationale as to /why./
Tom
On 10/22/19 5:24 PM, Perlow, Jason via Ipg-smz wrote:
> Reverse mergers are between a private company and a public company
> though, in which the private buys the public one. The scenario I am
> thinking about is two publicly traded companies but one has about 10X
> the valuation of another. But the smaller company has a market cap of
> $100B.
>
> On Tue, Oct 22, 2019 at 5:11 PM Tom Henderson via Ipg-smz
> <ipg-smz at netpress.org <mailto:ipg-smz at netpress.org>> wrote:
>
> Reverse mergers are pretty commonplace. Usually, it's structure,
> assets, cashcow-cashflow, management, international presence, etc
> that's the motivator. I've been involved with two of them. Many
> work out well, but a few of them are dodgy.
>
> Tom
>
>
> On 10/22/19 4:28 PM, Perlow, Jason via Ipg-smz wrote:
>> Good example
>>
>> On Tue, Oct 22, 2019 at 4:26 PM Steve Wexler
>> <stevewexler.wordslingers at gmail.com
>> <mailto:stevewexler.wordslingers at gmail.com>> wrote:
>>
>> It wasn't a 10x acquisition, but Dell-EMC pushed the
>> boundaries at least a little bit for the IT industry.
>>
>> On Tue, 22 Oct 2019 at 16:23, Perlow, Jason via Ipg-smz
>> <ipg-smz at netpress.org <mailto:ipg-smz at netpress.org>> wrote:
>>
>> Doesn't look great for the future of these things either
>>
>> https://www.washingtonpost.com/business/the-leveraged-buyout-industry-is-starting-to-eat-itself/2019/08/06/3a01e192-b843-11e9-8e83-4e6687e99814_story.html
>>
>> On Tue, Oct 22, 2019 at 3:42 PM Dan Rosenbaum via Ipg-smz
>> <ipg-smz at netpress.org <mailto:ipg-smz at netpress.org>> wrote:
>>
>> It sounds to me like you’re describing a classic
>> leveraged buyout, where a smaller company uses a
>> bigger company’s assets or cash to buy it. The
>> classic case was RJR Nabisco.
>>
>> d
>>
>> *From: *Ipg-smz <ipg-smz-bounces at netpress.org
>> <mailto:ipg-smz-bounces at netpress.org>> on behalf of
>> "Perlow, Jason via Ipg-smz" <ipg-smz at netpress.org
>> <mailto:ipg-smz at netpress.org>>
>> *Reply-To: *<ipg-smz at netpress.org
>> <mailto:ipg-smz at netpress.org>>
>> *Date: *Tuesday, October 22, 2019 at 3:28 PM
>> *To: *IPG List <ipg-smz at netpress.org
>> <mailto:ipg-smz at netpress.org>>
>> *Cc: *Jason Perlow <jperlow at gmail.com
>> <mailto:jperlow at gmail.com>>
>> *Subject: *[Ipg-smz] Asymmetrical Mergers
>>
>> Does anyone know, historically, of a merger between
>> two companies where the valuation was highly
>> asymmetrical? Such as when you might have a company
>> that is worth $1000B, but wants to merge with a
>> company that is worth $100B? They don't have the
>> assets to buy it outright, but it would be a
>> beneficial marriage.
>>
>> I am going by this list and I cannot find any that
>> are comparable.
>>
>> https://en.wikipedia.org/wiki/List_of_largest_mergers_and_acquisitions
>>
>> --
>>
>> *JASON PERLOW*
>>
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>>
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> Tom Henderson
> ExtremeLabs, Inc.
> +1 317 250 4646
> Twitter: @extremelabs
> Skype: extremelabsinc
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Tom Henderson
ExtremeLabs, Inc.
+1 317 250 4646
Twitter: @extremelabs
Skype: extremelabsinc
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