A.

Tender offer

A tender offer is a public offer made to the shareholders of a company by a potential acquirer to purchase their stock at a price much higher than the current market value of the stock. If all goes as planned, the shareholders who accept the tender offer make a significant profit on their holdings, and the acquirer gains control of the company.

B. JOINT VENTURE

Joint ventures are new enterprises owned by two or more participants. They are typically formed for special purposes for a limited duration.

It is a contract to work together for a period of time each participant expects to gain from the activity but also must make a contribution.

Reasons for forming a joint venture

Build on company's strengths Spreading costs and risks Improving access to financial resources Economies of scale and advantages of size Access to new technologies and customers Access to innovative managerial practices

C. SELL OFF

Selling a part or all of the firm by any one of means: sale, liquidation, spin-off & so on . Or

General term for divestiture of part/all of a firm by any one of a no. of means: sale, liquidation, spin-off and so on.

Motives for Sell off

Raising capital
Curtailment of losses Strategic realignment Efficiency gain

DEMERGERS
A demerger results in the transfer by a company of one or more of its undertakings to another company. The company whose undertaking is transferred is called the demerged company and the company (or the companies) to which the undertaking is transferred is referred to as the resulting company. A demerger may take the form of A spinoff or A split-up.

A split off

SPIN OFFS

Spin-off is a transaction in which a co., distributes on a pro-rata basis all the shares it owns in a subsidiary to its own shareholders. In a spinoff an undertaking or division of a company is spun off into an independent company. After the spinoff, the parent company and the spun off company are separate corporate entities.

SPLIT OFF

A transaction in which some, but not all, parent co., shareholders receive shares in a subsidiary in return for relinquishing their parent co., share.

In other words. some parent company shareholders receive the subsidiarys shares in return for which they must give up their parent company shares

Features

A portion of existing shareholders receives stock in a subsidiary in exchange for parent co., stock.

SPLIT - UP
In a split-up, a company is split up into two or more independent companies. As a sequel, the parent company disappears as a corporate entity and in its place two or more separate companies emerge.

In other words a transaction in which a co., spins off all of it subsidiaries to its shareholders & ceases to exist.

Features

The entire firm is broken up in a series of spin-offs. The parent no longer exists and Only the new offspring survive.
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DIVESTITURES

Represent the sale of a segment of a company (assets, a product line, a subsidiary) to a 3rd party for cash and or securities

Features:

It is used as a means of eliminating or separating:

a) b) c)

Product line Division Subsidiary.

It represents the sale of a segment of a co., to a 3rd party. The assets are revalued, by the sale, for purpose of future depreciation by the buyer.
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MOTIVES FOR DIVESTITURES

Change of focus or corporate strategy Unit unprofitable can mistake Sale to pay off leveraged finance Antitrust Need cash Defend against takeover Good price.

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Equity carve-out

A transaction in which a parent firm offers some of a subsidiaries common stock to the general public, to bring in a cash infusion to the parent without loss of control. In other words.. Equity carve outs are those in which some of a subsidiaries shares are offered for a sale to the general public, bringing an infusion of cash to the parent firm with out loss of control
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Features of ECO
It is the sale of a minority or majority voting control in a subsidiary by its parents to outsider investors. These are also referred to as split-off IPOs

A new legal entity is created. The equity holders in the new entity need not be the same as the equity holders in the original seller. A new control group is immediately created.

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Difference between Spin-off and Equity carve outs:

1.

In a spin off , distribution is made pro rata to shareholders of the parent co as a dividend, a form of non cash payment to shareholders In equity carve out , stock of subsidiary is sold to the public for cash which is received by parent co

2.

In a spin off , parent firm no longer has control over subsidiary assets In equity carve out, parent sells only a minority interest in subsidiary and retains control

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