Ratio Analysis
Valuations
Charting Technique
- Split Up is the process, entire organisation is divided to multiple companies
- After completion of spin off parent company losts its existance
- New Class of shares issued to Parent company's share holders, and each and every post spin off company having individual legal entity.
- Merger is a process of combining two or more entities into single entity
- Upon completion of merger only SURVIVING entity consists of physical existence, remaining compan(y)ies will lost their physical existance\surviving
- Merger Process can accomplish between:
- Based on aforementioned example, surviving entity(Company A) issues the shares to the nullifying the entity's (Company B) share holders
- Upon completion of merger process, SURVIVING ENTITY consists consolidated share holders of both companies
- Legal Acquirer: denotes about surviving entity
- Accounting Acquirer: denotes about the entity which holds major portion of voting shares in post merger entity
- Ownership doesn't change, remains with Surviving entity
- Legal Acquirer and Accounting Acquirer both are same
- Private company losts its physical existence
- Ownership of post merger entity goes into the hands of Accounting Acquirer
- Legal Acquirer and Accounting Acquirer both are two different entities
- based on below instance, though public entity is surviving entity, ownership goes into the hands to Private company's share holdes., as major portion of voting shares obtained by them
- Private company losts its physical existence
- Let merger transaction accomplished between Public and Private companies:
- His Custodian\Dealer name appears as record holder in the Books of the compnayh
- Borkerage firm receives the cash dividend from the company, subsequently transfers the same to beneficial Share holder
- He didn't receive the share certificatie from the compnay
- Shares held by beneficial share holders are entitled to participate in earnings as those shares are in circulation(with public)
Split Up
What is meant by Merger
Public to Public
Public to Private
Public to Private
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Forward Merger Vs Reverse Merger
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If Surviving entity share holders helds >50% of voting shares it is termed as FORWARD MERGER
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Else If Surviving entity share holders helds < 50% of voting shares it is termed as REVERSE MERGER
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Difference between Merger and Acquisition
The only difference between Merger and Acquistion is., in case of Merger Private company losts it existence. Coming to Acquistion Private company remains as wholly owned subsidiary of Public company
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Reverse Acquisition
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Beneficial Shareholders Vs Record Shareholders
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Beneficial Share Holders:
