Английский язык. Практический курс для решения бизнес-задач - Нина Пусенкова

8. a defense tactic used by the takeover target firm. The company goes after the raider firm and tries to take it over to prevent being taken over.

9. an illegal activity in which an investor or group of investors holds securities in its name until the raider needs them. The raider used this tactic secretly to gain a large enough stake in a firm. This allows him to «sneak up on» the takeover target; the target has little time to plan a defense.

10. a provision set up by the target company that forces the cost of a hostile acquisition to increase dramatically. The aim is to make it too expensive for the raider to acquire the firm.

11. the person or company attempting the takeover of another company

12. provision under which a target company will acquire a troublesome firm in order to raise the acquisition price and make acquisition by other parties economically unattractive

13. when a target firm implements this strategy, it will make an effort to make it unattractive to the hostile bidder. For example, a company may agree to liquidate or destroy all valuable assets, or schedule debt repayment to be due immediately following a hostile takeover

14. anti-takeover corporate charter amendments

15. a raider who sells off some of the assets of the target company once the target is acquired

16. any technique used by a target firm in which takeover protection could result in self-destruction

17. a company that is friendly to the takeover target. It intercedes to offer better terms or a better price

Takeover Terms:

Shark Repellents. Poison Pill. Stripper. White Knight. Crown Jewel. Suicide Pill. Lobster Trap. Golden Parachute. Scorched Earth Defense. Greenmail. Killer Bees. Maiden. Pac Man. Raider. Parking. Safe Harbor. Nancy Reagan Defense.

Exercise 4*. Fill in the blanks using terms given below.

Mergers and Acquisitions

The term M&A refers to the aspect of……. strategy and management dealing with the merging and acquiring of different companies. Usually mergers occur in a friendly setting where executives from the respective companies participate in a…… process to ensure a successful combination of all parts. Historically, though, mergers have often failed to add significantly to………

Financing M&A

Technically, what differentiates a merger from an acquisition is how it is financed:

Merger

A «merger» or «merger of equals» is often financed by an all stock deal (a stock…….). An all stock deal occurs when all of the owners of stocks of either company get the same amount of stock in the new combined……. The term…… is sometimes used to indicate the effective opposite of a merger, where one company splits into two.

Acquisition

An acquisition (of un-equals, one large buying one small) can involve a cash and…….. combination, or just cash, or a combination of cash and stock of the…… entity, or just stock. In addition, the acquisition can take the form of a purchase of the stock or other…….. of the target entity, or the acquisition of its assets.

High-yield

In some cases, a company may acquire another company by issuing…….. debt to raise funds (often referred to as a……). The reason the debt carries a high yield is the……. involved. The owner can not or does not want to risk his own money in the deal, but…….. are willing to finance the deal for a high……. The combined company will be the……..of the high-yield debt and it will be on its balance sheet. This may result in the combined company having a low……… to loan capital ratio.

Motives behind M&A

The following M&A motives are considered to add shareholder value:

………: This refers to the fact that the combined company can often reduce……… departments or operations, lowering the costs of the company relative to theoretically the same revenue stream, thus increasing profit.

Increased revenue/Increased market share: This motive assumes that the company will be absorbing a major competitor and increasing its power (by………. increased market share) to set prices.

……….: For example, a bank buying a stock broker could then sell its banking products to the stock broker’s customers, while the broker can sign up the bank’s customers for brokerage……… Or, a manufacturer can acquire and sell…….. products.

……….: Better use of complementary resources.

Taxes: A profitable company can buy a…….. to use the target’s tax……..

Geographical or other………: This is designed to smooth the earnings results of a company, which over the long term smoothes the stock price of a company, giving………. investors more confidence in investing in the company. However, this does not always……… to shareholders.

The following motives are considered to not add shareholder value:

Diversification: While this may hedge a company against a……… in an individual industry it fails to deliver value, since it is possible for individual shareholders to achieve the same hedge by diversifying their……… at a much lower cost than those associated with a merger.

Overextension: Tend to make the organization fuzzy and………..

Manager’s ambitions: Often the executives of a company will just buy others because doing so is newsworthy and increases the…….. of the company.

………: Managers have larger companies to manage and hence more power.

Manager’s сompensation: In the past, certain executive management teams had their……….based on the total amount of profit of the company, instead of the profit per share, which would give the team a perverse……… to buy companies to increase the total profit while decreasing the profit per share (which hurts the owners of the company, the shareholders).

Source: Wikepidia

Terms:

overlapping, risk, economies of scale, incentive, borrower, portfolios, profile, write-offs, high-yield, cross selling, corporate finance, due diligence, empire building, conservative, shareholder value, swap, entity, «demerger», debt, acquiring, equity interest, leveraged buyout, cost of capital, shareholder’s equity, capturing, accounts, complementary, synergy, loss maker, diversification, deliver value, downturn, unmanageable, remuneration, third parties

Exercise 5. Translate into English.

Абрамович свое получит

«Газпром» заплатит $13 млрд за 72,6% акций «Сибнефти».

Заключена крупнейшая в истории России сделка: «Газпром» покупает 72,6% акций «Сибнефти» за $13 млрд. Продавец, самый богатый россиянин Роман Абрамович, возможно, навсегда покончит с бизнесом внутри страны, оставив здесь лишь благотворительные проекты.

Сделка десятилетия

Весной 2004 г. «Газпром» впервые объявил, что хочет стать нефтяной компанией. Сначала он собирался поглотить «Роснефть» и «Юганскнефтегаз», который выставлялся на торги за долги «ЮКОСа». Но, когда «Юганск» достался «Роснефти», а та отбилась от слияния, «Газпром» начал договариваться о покупке «Сибнефти».

Вчера ударили по рукам: «Газпром» подписал соглашение с Millhouse Capital по покупке 72,6% «Сибнефти» за $13 млрд, сообщили компании в совместном заявлении. Еще 3% «Сибнефти» монополия выкупила у Газпромбанка, и в ее распоряжении будет более 75% нефтяной компании. Сделка заключена на рыночных условиях, цитирует «Газпром» председателя совета директоров, главу администрации президента Дмитрия Медведева. Вчерашняя цена одной бумаги в РТС – $3,65, днем ранее – $4, а по условиям сделки – $3,8. Капитализация «Сибнефти» в РТС – $17,3 млрд, а стоимость 72,6% – $12,57 млрд. «Всем очевидно, что условия рыночные, а цена справедлива для всех», – говорит Боб Форесман, глава Dresdner Kleinwort Wasserstein в России, которая консультировала «Газпром».

Подробнее ни «Газпром», ни «Сибнефть» не комментируют ситуацию. Два хорошо знакомых с условиями сделки бизнесмена обещают, что закроется она быстро: владельцы получат все деньги до конца октября. Это подтверждает и менеджер «Газпрома». В сделку войдут некоторые активы, не принадлежащие «Сибнефти» напрямую: 50% «Славнефти» и 38,5% в Московском НПЗ. Об этом сообщили два источника, близких к сделке. $13 млрд – это не все доходы продавцов компании. Незадолго до сделки акционеры «Сибнефти» утвердили дивиденды в $2,3 млрд.

Кредитовать «Газпром» на покупку будут банки ABN Amro и Dresdner Bank, Citigroup, Credit Suisse First Boston, Goldman Sachs, Morgan Stanley. Два банкира утверждают, что речь идет о займе до $13 млрд. Часть кредита «Газпром» впоследствии рефинансирует за счет средств, которые в конце года получит от «Роснефтегаза» (166,4 млрд руб.), а также за счет долгосрочных кредитов и еврооблигаций.

Формально «Газпром» не получил разрешения на покупку, а его совет директоров перенес вопрос на следующее заседание. Против сделки прямо высказывался министр экономического развития Герман Греф. Но это уже не имеет значения, уверен источник, близкий к Кремлю. В июле Владимир Путин признался, что знает о переговорах и акционеры «Сибнефти» «должны воспринимать это как рыночную сделку». Тогда его слова трактовали по-разному, говорит собеседник «Ведомостей», но теперь ясно, что это было одобрение.

Покупка «Газпрома» – крупнейшая за всю историю нашей страны. Максимум M&A в России зафиксировал Ernst & Young: в 2004 г. было заключено сделок на $30 млрд с учетом «Юганска». Заодно сделка с «Сибнефтью» попала на 3-е место в списке слияний в мировом энергосекторе, оплаченных деньгами. В 1999 г., по данным Thomson Financial, группа инвесторов купила итальянскую Ente Nazionale per l’Energia за $18,7 млрд, а испанская Repsol заплатила за аргентинскую YPF $17,4 млрд.

Источник: Ведомости, 29.09.05 (отрывок)

Lesson 21

Emerging Markets

Read and translate the text and learn terms from the Essential Vocabulary.

Emerging Markets: Has Their Time Finally Come?

With the world poised at critical crossroads – between recession and growth, war and peace, optimism and pessimism – now seems to be a timely moment to reconsider the case for emerging markets. In 2003, emerging equity markets actually held their value more successfully than developed markets, with declines of considerably smaller magnitude than those seen in the U.S., Europe and developed Asia.

The term «emerging markets» was coined by the World Bank’s International Finance Corporation in the early 1980s. Typically, emerging markets are in countries that are in the process of industrialization, with lower gross national product (GNP) per capita than developed countries. Of the 130 countries that the international financial community considers to be emerging countries, approximately 40 currently have stock markets. Emerging markets became the new frontier of global investing in the late 1980s and saw spectacular returns in the early 1990s, only to be followed by an exceptionally long span of disappointing returns. These markets seemed to lurch from one period of intense crisis to another with only intermittent spells of relief. The most intense storms during the 1990s were the Mexican peso devaluation of 1994 and its subsequent «tequila effect» contagion, the Asian financial crisis of 1997—1998, and the Russian ruble devaluation and debt default of 1998, which spread systemic risk into developed markets. Recently, the Argentine financial crisis has been in the spotlight.

During the longest U.S. bull market in history, emerging markets might better have been termed «submerging markets», declining 43% from 1994 to 2001, during a period when the S&P 500 index gained 130%. The disconnect between the potential of emerging markets and the actual returns of recent years has been extremely trying for investors, and many have decreased or eliminated their allocation to this asset class.

Despite the current sentiment, there is a strong case to be made that now is an ideal time for emerging markets investment. Like value investing renaissance in 2000 following the burst of the Internet bubble, market turning points are often uncomfortable, and even painful in the short term. It is important to remember that when the economic outlook and investor sentiment are at their worst, even a small turn of events toward the positive can be enough to re-ignite markets. Some observations suggest that emerging markets offer a compelling investment opportunity at present.