Uni of Law 2018/2019
Mergers & Acquisitions Prep & Workshop Notes
Workshop 1: Preliminary Matters
Prep Task 1: Share or Asset Acquisition
Based on the information that we currently hold about the proposed purchase of Alphacom ltd. I
would like you to prepare the following for a meeting later today.
1. A structure diagram indicating the key parties and documents for the acquisition if it
proceeds as a share purchase.
2. A structure diagram indicating the key parties and documents for the acquisition if it
proceeds as an asset purchase.
3. An outline of the key considerations for Rethink Limited in deciding whether to proceed with
a share purchase rather than an asset purchase.
4. A list of factors outlining why the sellers want the transaction to proceed as a share sale.
Notes on acquisition:
- The company has one subsidiary (Alphacom Research Limited).
- John wants to keep management team who hold about 10% of shares. They are looking to
sell their shares.
- Alphacom has a strong client portfolio and attractive office space in London.
- Gandover Holdings is the majority shareholder of Alphacom and he is looking for an exit
from the company.
- All the shareholders of Alphacom are pushing for a share sale. The board of Rethink Ltd are
also pushing for a share sale.
Acquisition if it proceeds as a share purchase
In a share acquisition where the buyer acquires all or the majority of the shares in the target
company, it is the ownership of the company itself that is transferred. The sale and purchase
agreement is made between the buyer and the owner(s) of the shares (the seller(s)). The target
company otherwise remains in exactly the same shape as it was prior to the acquisition and, in
particular, it still owns and runs the business. The target company will continue to have whatever
assets, liabilities, rights or obligations it had before the acquisition.
Benham Warstein Inc.
Silver Tree Ltd
10%
Gandover Holdings Ltd. Management (Simon, Richard and Sarah) Rethink Ltd.
80% 10% Purchase from shareholders 100%
Alphacom Ltd
100%
Alphacom Research Ltd.
1
Mergers & Acquisitions Prep & Workshop Notes
Workshop 1: Preliminary Matters
Prep Task 1: Share or Asset Acquisition
Based on the information that we currently hold about the proposed purchase of Alphacom ltd. I
would like you to prepare the following for a meeting later today.
1. A structure diagram indicating the key parties and documents for the acquisition if it
proceeds as a share purchase.
2. A structure diagram indicating the key parties and documents for the acquisition if it
proceeds as an asset purchase.
3. An outline of the key considerations for Rethink Limited in deciding whether to proceed with
a share purchase rather than an asset purchase.
4. A list of factors outlining why the sellers want the transaction to proceed as a share sale.
Notes on acquisition:
- The company has one subsidiary (Alphacom Research Limited).
- John wants to keep management team who hold about 10% of shares. They are looking to
sell their shares.
- Alphacom has a strong client portfolio and attractive office space in London.
- Gandover Holdings is the majority shareholder of Alphacom and he is looking for an exit
from the company.
- All the shareholders of Alphacom are pushing for a share sale. The board of Rethink Ltd are
also pushing for a share sale.
Acquisition if it proceeds as a share purchase
In a share acquisition where the buyer acquires all or the majority of the shares in the target
company, it is the ownership of the company itself that is transferred. The sale and purchase
agreement is made between the buyer and the owner(s) of the shares (the seller(s)). The target
company otherwise remains in exactly the same shape as it was prior to the acquisition and, in
particular, it still owns and runs the business. The target company will continue to have whatever
assets, liabilities, rights or obligations it had before the acquisition.
Benham Warstein Inc.
Silver Tree Ltd
10%
Gandover Holdings Ltd. Management (Simon, Richard and Sarah) Rethink Ltd.
80% 10% Purchase from shareholders 100%
Alphacom Ltd
100%
Alphacom Research Ltd.
1
