考试代写-LAWSG077
时间:2022-05-03
LAWSG077 (2017) 1

CROSS-BORDER MERGERS AND ACQUISITIONS

Answer THREE questions out of the six questions available, including at least ONE
question from PART A and at least ONE question from PART B.

PART A
1. On July 25, 2016, UK telecommunications company Merizon plc (“Merizon”), which
is premium listed on the London Stock Exchange and has a market value of £25
billion, offered £4.83 billion to purchase the search engine business currently owned
by Yupee, Inc. (“Yupee”). Yupee is a US internet company listed on the New York
Stock Exchange, which, in addition to internet search, is also active in marketing
services and – because of the company’s complicated corporate history – oil
exploration. Providing its reasons for the offer in a press release, Merizon explained
that the acquisition would ‘help the company to better serve Yupee’s existing users’
and also ‘create a new powerful competitive rival in mobile media, and an open,
scaled alternative offering for advertisers and publishers’.

Although Yupee’s board and shareholders would prefer a higher price, they
generally support a negotiated transaction with Merizon. Following talks between
the parties, on September 5, 2016 Merizon and Yupee signed an asset purchase
agreement (the “APA”). Under the APA, Merizon acquires all assets and liabilities
that are related to Yupee’s core search engine business. The parties plan to close
the transaction in June 2017.

On November 10, 2016, Yupee made a major announcement: the company
confirmed a data breach that compromised more than 500 million user accounts.
The company said a wide array of user information was taken from its network in
2014 by a “state-sponsored actor”, but it did not include unprotected passwords,
payment card data or bank account information. Yupee’s CEO, Larissa, knew about
this breach since March 2016. On September 4, 2016, a group of Yupee employees
also learn that there had been another attack on Yupee’s servers, resulting in an
unknown intruder gaining access to another 2 million users’ account data. They do
not mention this to Larissa as they still need to investigate the incident.

Given the unfortunate turn of events, Merizon’s board has called an urgent meeting
to discuss the Yupee transaction today. Please advise the board on its options to
deal with the data breach problem. Additionally, please (a) explain what the
potential significance of the second (smaller) data breach is for the transaction and
(b) comment on the transaction structure that the parties chose, focusing
specifically on whether you think it was an adequate choice and discussing if there
had been any suitable alternative structures.

(Question 1 continues)

TURN OVER


LAWSG077 (2017) 2

(Question 1 continued)

Your advice on the options to deal with the data breach should make up
approximately 50% of your answer, your responses to the additional questions (a)
and (b) should make up approximately 25% each. In answering all questions, you
are allowed to make factual assumptions where you lack the necessary information
but please make sure to indicate what these assumptions are and why they are
relevant.


2. Tony Cash is the Chief Financial Officer (CFO) of Snappy Corp. (“Snappy”), a US
company listed on the NASDAQ (an American stock exchange). Tony has recently
become highly stressed as a result of ongoing high pressure merger negotiations
involving Snappy and several companies that are keen to acquire it. Tony begins
seeing a psychologist for therapy. In the course of one of their sessions, Tony
discloses to his psychologist, Betty, that his company will soon be taken over by a
competitor. Betty writes down this information in her notebook. After Tony leaves,
and unbeknownst to him, Betty purchases 200 Snappy shares. Later that day,
Betty’s cleaner, Jim, not only cleans Betty’s office but – because he is bored – also
goes through her notebook. He discovers the information regarding Snappy and
also purchases a few Snappy shares.

As a result of Betty’s therapy, Tony is already feeling much better. In fact, he is in
such a good mood that, when a complete stranger (Evan) passes him on the street,
he yells out “Buy Snappy shares and you’ll be rich! I should know, I’m the CFO!”
Tony also tells his mother, Doris, about the impeding transaction involving his
company. Doris is a retired medical doctor but has a long history of successfully
trading with shares and options as one of her “hobbies”. Both Evan and Doris
purchase Snappy shares. Two weeks later, Facepic, Inc. announces a bid for
Snappy and the share price of the latter rises by 28%.

What are the liabilities of Tony, Betty, Jim, Evan, and Doris under US insider trading
law?













CONTINUED

LAWSG077 (2017) 3

3. You have just received the email reproduced below from a prospective client.
Please prepare detailed notes on what you will tell the client, Clive, in your
telephone conversation regarding the proposed transaction, including any questions
that you might have as well as the next steps that need to be taken. Moreover,
advise on whether a letter of intent (LOI) should be used and, irrespective of
whether or not you recommend an LOI, discuss and explain the main points that
ought to be covered in this document.


EMAIL

From: Clive Client, in-house lawyer at Bidder, Inc.

To: Stephen Student, corporate counsel at Billem Solicitors

Subject: Proposed Acquisition of Target Group


Dear Stephen,

I have read your excellent article on ‘Current Challenges in Cross-Border M&A’ in
the Journal of Business Law. Given your expertise in this area, I was wondering
whether you could assist my company, US-based healthcare provider Bidder, Inc.
(“Bidder”) in its latest transaction. Bidder is now considering acquiring the Target
Group (“Target”), which is headquartered in the UK and is owned by a foreign
majority shareholder. Negotiations have already been launched and I have been
asked to provide a draft letter of intent for presentation to the board by the end of
tomorrow.

To be honest, I am not sure whether having a letter of intent will be beneficial for us.
We would like to close as soon as possible and, in addition, would hate to trigger
any unforeseen legal consequences. I am also unsure as to how we should
proceed and what to consider at this stage of the transaction – can you please
advise? Nevertheless, as a heads up and if we should decide to have an LOI, I
would like you to provide me with a draft first thing tomorrow morning. I appreciate
that this is rather short notice but I am sure it will be a pretty standard document for
Billem Solicitors.

Please call me today to discuss.

Kind regards,

Clive

TURN OVER



LAWSG077 (2017) 4

PART B
4. “Given its obvious advantages and efficiencies, the private equity model will soon
eclipse the traditional public corporation”.

Please discuss this statement.


5. “Amalgamation of corporations by statutory merger is often troublesome because of
the special protections granted to minority shareholders. Regrettably, however, the
courts have found ways to undermine even transactions that were carefully planned
to avoid these complications”.
Please discuss this statement.

6. Please compare and critically analyze the legal framework governing defenses
against hostile takeovers in the UK and the US. In your essay, please also discuss
which model you prefer, why you prefer it, and what could be done – if anything – to
improve the law in this area in the future.




END OF PAPER

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