

<head> Tipster Topic Description

<num> Number: 002

<dom> Domain: International Economics

<title> Topic: Acquisitions


<desc> Description:

Document discusses a currently proposed acquisition involving a U.S.
company and a foreign company.


<narr> Narrative:

To be relevant, a document must discuss a currently proposed
acquisition (which may or may not be identified by type, e.g., merger,
buyout, leveraged buyout, hostile takeover, friendly acquisition).
The suitor and target must be identified by name; the nationality of
one of the companies must be identified as U.S. and the nationality of
the other company must be identified as NOT U.S.

<con> Concept(s):

1.  acquisition, takeover

2.  suitor, target

3.  merger, buyout, leveraged buyout (LBO)

4.  arb, arbitrage, arbitrager, leverage, offer, bid, tender, purchase

5.  anti-takover, poison pill, white knight, restructure, sale of
assets, recapitalization


<fac> Factor(s):

<nat> Nationality: U.S.

<nat> Nationality: NOT U.S.

<time> Time: Current

</fac>


<def> Definition(s):

Acquisition - The taking over by one company of a controlling interest
in another, also called a takeover.  The action may be friendly or
unfriendly.  The company initiating the takeover is the suitor.  The
company which is taken over is the target.

Arbitrage - A form of speculation in which the purchase of an asset in
one market is accompanied by a simultaneous sale of the same (or a
similar) asset in a different market, to take advantage of a
difference in price.  Arbitragers or arbs buy a company's shares at
today's price expecting them to be bid for tomorrow at a higher price
in a takeover bid.  When they do this knowing that a bid is coming,
they are indulging in insider trading.

Hostile Takeover - An acquisition in which the suitor company plans to
replace management or liquidate assets, etc. of the target company.
The target company may institute some countermeasure, called a poison
pill.  An investor or group which tries to assist the target company
is a white knight.

Leveraged Buyout (LBO) - Takeover of a company using borrowed funds,
with the target company's assets serving as security for the loans
taken out by the acquiring firm.  The acquiring firm repays the loans
out of the cash flow of the acquired company or from the sale of the
assets of the acquired company.

Merger - The acquisition by one corporation of the stock of another.
The acquiring corporation then retires the other's stock and dissolves
that corporation.  Therefore, only one corporation retains its
identity in a merger.

Tender Offer - An offer to buy shares of a corporation, usually at a
premium above the shares' market price, for cash, securities, or both,
often with the objective of taking control of the target company.