Date                                                                                  

21 November 2008
24 April 2009
13 October 2009

Course Overview

For a quoted company whose shares trade in an illiquid market at a price that consistently fails to recognise its prospects, the rationale for ‘going private’ is compelling.

Private equity houses have a strong appetite and ample funds to invest in established companies with sufficiently predictable cash flows to service the debt raised to finance a management buy-out.

This course will enable participants to gain a detailed understanding of the financial, legal and regulatory processes of taking a public company private.

Course Content

Background
Rationale for going private
Availability of funds
Overview of an offer

P2Ps and the Takeover Code
General Principles and the Blue Book
Particular rules for P2Ps
Resolution of conflicts of interest
Rule 3 advisers
Role of independent directors
Unequal treatment for the MBO team?
Disclosure of information (rules 20.2 & 20.3)
Incentivisation of MBO team
ISC Guidelines
Concert party problems

The MBO decision
The management’s perspective
    • Estimating the offer price
    • How much should the MBO team invest?
    • What percentage equity should they get?
    • Particular risks to be considered
    • The business plan & financial model
    • Appointment of advisers
The private equity house
    • Is the business suitable for an MBO?

Structuring the deal
Pure equity, quasi equity & ratchets
PIK, mezzanine & zeros
Vendor loan notes & stub equity
Bridging finance & securitisation
Senior debt and alphabet notes
Financial assistance & the whitewash procedure
The three debenture approach
The ‘Certain Funds’ rule

Making the offer
Legal considerations
Negotiations with the target
Irrevocable undertakings
Schemes of arrangement
When to declare the offer unconditional
Squeeze out provisions
Dealing with minorities
Conduct during the offer (Code timetable)