Publication Date: November 1, 2016
Soft catalyst special situations, which include pre-event M&A, is a popular strategy among event driven funds and can be lucrative. While it is not a deal that we would usually cover, the Delta Lloyd / NN Group pre-event situation is of particular interest as it illustrates the difficulty in: 1) assessing the outcome of a proposed offer; and, 2) concluding whether or not companies will eventually agree to an M&A transaction. Through statistical analysis and a thorough investigation of precedent takeover proposals, we highlight the risks involved in buying potential targets at elevated prices in hopes of an agreed deal, an increased proposal or a counterbid. Funds only need to have experienced or read our case studies on failed European pre-event M&A, such as K+S (SDF GY) / Potash (POT CN), Syngenta (SYNN VX) / Monsanto (MON US) and AstraZeneca (AZN LN) / Pfizer (PFE US), among others, to understand how swift and significant losses can be in undertaking this strategy.
1. Rationale for a Takeover and Reasons Why Delta Lloyd is Opposed to It 2. Delta Lloyd - Financial Valuation Analysis 3. Shareholder Reactions and Strategies: Fubon and Highfields 4. Dutch Stichting ‘Poison Pill’ Considerations 5. NN Group Strategies and Potential Outcomes 6. Pre-Event M&A: Enthusiasm Versus Reality 7. Failed Precedent Deals in the Context of Pre-Event M&A 8. Market Share Data and Antitrust Considerations
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