LPC 2020 PRIVATE ACQUISITIONS
Night Before Notes
Table of Contents CASES
SGS 1 – Introduction to Auction Sales 1
SGS 2 – Advanced Due Diligence, Process Letter 5 SGS 2 Advanced due diligence
SGS 4 – Warranties and Indemnities 15 Aveling Barford – deemed distribution
SGS 5 – Disclosure and Vendor Protection 23 Blackpool – consider all bids validly made
SGS 6 - Amending an Acquisition Agreement 32
SGS 7 - Key Issues on Asset Sale 37 SGS 4 Disclosure
SGS 8 – Asset Sales: Tax Issues 56 Level of disclosure depends on the precise wording of the acquisition
SGS 9 – Private Equity and MBO 62 agreement (Infiniteland)
SGS 10 – Contractual Provisions in an MBO 66
Levison Specific notice of matter the seller wants to disclose must be
LAW given to the buyer, disclosing means of knowledge which may enable
the other party to work out certain facts is insufficient
CA
S172-7 – directors duties, s188 long-term svc contracts Infiniteland Whether the disclosure effectively qualifies the warranties
S393 – true and fair view of accounts in any acquisition agreement will depend upon the level of disclosure
S979 – squeeze out that the buyer has agreed to accept (requirements of the SPA)
S983 – sell out
Dawson v Great Northern & City Railway If assignment of the
FSMA warranties and indemnities in the acquisition agreement is permitted,
s19 regulated activity under equitable principles, an assignee cannot recover from the debtor
s21 financial promotions (in this case the seller) more than the assignor could have recovered had
s85 prospectus the assignment never taken place
FSA Zim Properties where seller makes indemnity payment to target
s89 directly, target may be required to pay tax on indemnity payment when
it is received
TUPE
Reg 3 – relevant transfer = transfer of undertaking SGS 5 Buyer knowledge
Reg 4 – effect of relevant transfer on contracts of employment + applies to Infiniteland depends on wording of AA
employees ‘assigned’ immediately before the transfer or who would have been
so employed if dismissed in the circumstances described in 7(1) SGS 6 Carve-out for fraud in EAC
Reg 7 – before or after transfer, employee is dismissed where the sole or Thomas Witter If Buyer wants to claim misrep, it would have to hope
principal reason is the transfer this is unfair dismissal that the clause is found is found unreasonable under s 3 MA on the
Reg 10 – occupational pension liability don’t transfer (but Pensions Act 2004 – B grounds that it attempts to exclude liability for fraud
have to contribute) Grimstead But may not be necessary and the Buyer may be estopped
Reg 13 – inform and/or consult from claiming misrep
Reg 13A – microbusinesses – directly with employees
Reg 15 – joint and several
Reg 16 – (link to 13) failure to inform and consult
SGS 1 – Introduction to Auction Sales
Auction vs Private Treaty
Auction Sale Private Treaty Sale
Acquisition Agt Seller (thus more expensive) Buyer
(first draft)
Disclosure letter Seller Seller
(first draft)
Confidentiality All potential bidders (Target may be Potential buyer (Target may be party
Agreement party but if not, then include clause but if not, then include clause that both
that both seller and future owners of seller and future owners of Target can
Target can enforce the confidentiality enforce the confidentiality undertakings
undertakings) *Before (or same time) heads of terms
Other Information Memorandum Heads of terms
Documentation
1
Night Before Notes
Table of Contents CASES
SGS 1 – Introduction to Auction Sales 1
SGS 2 – Advanced Due Diligence, Process Letter 5 SGS 2 Advanced due diligence
SGS 4 – Warranties and Indemnities 15 Aveling Barford – deemed distribution
SGS 5 – Disclosure and Vendor Protection 23 Blackpool – consider all bids validly made
SGS 6 - Amending an Acquisition Agreement 32
SGS 7 - Key Issues on Asset Sale 37 SGS 4 Disclosure
SGS 8 – Asset Sales: Tax Issues 56 Level of disclosure depends on the precise wording of the acquisition
SGS 9 – Private Equity and MBO 62 agreement (Infiniteland)
SGS 10 – Contractual Provisions in an MBO 66
Levison Specific notice of matter the seller wants to disclose must be
LAW given to the buyer, disclosing means of knowledge which may enable
the other party to work out certain facts is insufficient
CA
S172-7 – directors duties, s188 long-term svc contracts Infiniteland Whether the disclosure effectively qualifies the warranties
S393 – true and fair view of accounts in any acquisition agreement will depend upon the level of disclosure
S979 – squeeze out that the buyer has agreed to accept (requirements of the SPA)
S983 – sell out
Dawson v Great Northern & City Railway If assignment of the
FSMA warranties and indemnities in the acquisition agreement is permitted,
s19 regulated activity under equitable principles, an assignee cannot recover from the debtor
s21 financial promotions (in this case the seller) more than the assignor could have recovered had
s85 prospectus the assignment never taken place
FSA Zim Properties where seller makes indemnity payment to target
s89 directly, target may be required to pay tax on indemnity payment when
it is received
TUPE
Reg 3 – relevant transfer = transfer of undertaking SGS 5 Buyer knowledge
Reg 4 – effect of relevant transfer on contracts of employment + applies to Infiniteland depends on wording of AA
employees ‘assigned’ immediately before the transfer or who would have been
so employed if dismissed in the circumstances described in 7(1) SGS 6 Carve-out for fraud in EAC
Reg 7 – before or after transfer, employee is dismissed where the sole or Thomas Witter If Buyer wants to claim misrep, it would have to hope
principal reason is the transfer this is unfair dismissal that the clause is found is found unreasonable under s 3 MA on the
Reg 10 – occupational pension liability don’t transfer (but Pensions Act 2004 – B grounds that it attempts to exclude liability for fraud
have to contribute) Grimstead But may not be necessary and the Buyer may be estopped
Reg 13 – inform and/or consult from claiming misrep
Reg 13A – microbusinesses – directly with employees
Reg 15 – joint and several
Reg 16 – (link to 13) failure to inform and consult
SGS 1 – Introduction to Auction Sales
Auction vs Private Treaty
Auction Sale Private Treaty Sale
Acquisition Agt Seller (thus more expensive) Buyer
(first draft)
Disclosure letter Seller Seller
(first draft)
Confidentiality All potential bidders (Target may be Potential buyer (Target may be party
Agreement party but if not, then include clause but if not, then include clause that both
that both seller and future owners of seller and future owners of Target can
Target can enforce the confidentiality enforce the confidentiality undertakings
undertakings) *Before (or same time) heads of terms
Other Information Memorandum Heads of terms
Documentation
1
