This is an extract of our Merger Control Letter Of Intent Ws 2 Prep Task And Ws Tasks document, which we sell as part of our Private Acquisitions Notes collection written by the top tier of Cambridge And Oxilp And College Of Law students.
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Prep Task and WS Tasks
1. Factors impacting on the method of sale: a. Mergers are regulated in the UK by the Enterprise Act 2002 (EA 2002). However, where European Regulation 139/2004 applies (ie where the merger has a 'Community dimension') this overrides the UK legislation, or that of any other EU Member State. b. There are two options for the sale, a Private Sale and an Auction Sale. The choice depends on whether: c. Is it a Public or a Private Co.? This is a Private Company. Auction Sale
- By S.755(1) CA 2006 Private Co.'s cannot offer shares for sale to general public. BUT,
- By s.756(3) and advertisement issued to specifically identified B's is the exception, BUT
- Note FSMA 2000
d. e. f. g.
- there are no restrictions on the company to be sold in a private sale.
How quickly do they want to do it?
Are the potential buyers serious about the purchase?
Confidentiality Agreement + Due Diligence Negotiating favourable terms within the SPA
2. Application of merger control regulation in the EU or the UK if the private sale proceeds:
1. Apply the EU Test: The EU Merger Regulation 139/2004 will apply to anasset/share/merger purchaseof a Pub or Priv Co. if it constitutes a concentration with a Community dimension:
1. Merger of two or more independent undertakings:
Is there a Concentrat ion?
Under Art. 3 of EU Reg. 139/2004
Does The 2/3rdsRule apply?p.27 EU
Is there a Community DimensionComme nt YES
2. Acquisition of direct/indirect control of the whole or part of an undertaking or undertakings:
- Control means: more than just voting control it includes a situation where one party can exercise decisive influence over another (over 25% is being purchased)
- Acquisition means:a direct financial purchase by contract, a purchase of shares or securitiesor any other resources. If the main impact 2/3rdsof the merger is within one Member State, it will not have a Community dimension. It may be caught by national competition rules. If the 2/3rdsrule applies the commission will not have jurisdiction. Test 1 1. The Aggregate Worldwide turnover of all the parties exceeds EU5,000m; and
2. The aggregate community-wide turnover of each of at least two of the parties exceeds Or,
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