m&a syllabus

MERGERS AND ACQUISITIONSWinter 2011

Professor Alicia Davis

Course Materials - The required materials for the course are the casebook (“CB”), Peter V. Letsou, Cases and Materials on Corporate Mergers and Acquisitions (2006); selected Harvard Business School case studies (“HBS Cases”); and course pack materials excerpted from Therese H. Maynard, Mergers and Acquisitions: Cases, Materials and Problems (1st and 2nd eds., 2005 and 2009) (“MACMP”).

Assignments - An assignment sheet for the course is attached. Each numbered assignment roughly corresponds to one class period, but certain units of assigned readings may take more than one class period to discuss. Please note that assignments are subject to change.

HBS Cases - The HBS Cases are based on actual business and legal situations. Please do not do outside research related to any of the HBS Cases before we discuss the cases in class.

Final Exam - The final exam is a four-hour, open book exam. The exam will consist of multiple choice and essay questions. During the exam, you may refer to the course materials, your class notes, outlines that you prepared yourself or participated in preparing and a foreign language (translating, non-legal) dictionary. You also may use a calculator or spreadsheet program during the exam. No treatises, commercial outlines or other outside materials may be used. At the conclusion of the exam, in addition to your answers, you must return the exam booklet. A failure to return the exam booklet in its entirety will result in your final course grade being dropped a full letter grade (e.g., from B+ to C+).

Group Simulation - You will be required to form groups and complete a simulation exercise. I will provide details on the simulation later in the semester.

Class Participation - Class discussions are richest when as many of you as possible are prepared to participate. However, I understand that a variety of circumstances may prevent you from preparing for class on any given day. Therefore, if you are unprepared on a particular day, please email me by 9:30 AM on the day of class to let me know you will be unable to participate in the upcoming class discussion. You are neither required nor expected to give me a reason for your lack of preparation.

Being Prepared – Being prepared means you have completed all of the assigned reading, have made a good faith attempt to understand the key issues, and are able to give a well thought-out and reasoned response to each assigned discussion question. If you are not prepared for class, you should opt out of class discussion.

Attendance – Regular attendance is required. If you are unable to attend a class session, please email me in advance to let me know you will not be present.

Distractions – You may not access or use the Internet, email, instant messaging, games and the like while class is in session. Laptop computers may be used during class only for note taking.

Grading - Your course grade will be based on your performance on the final exam (85%) and the group simulation project (15%). Additional points for consistently outstanding contributions to class discussions also may be factored in to the final course grade.

CTools – Please check CTools regularly for assignment questions, class announcements and supplemental materials of particular relevance to the course that I may post from time to time.

Office Hours/Questions - My office is 437HH. I will hold regular office hours from 1:30 PM – 3:30 PM on Wednesdays. You also may contact me by phone (734-763-2221) or e-mail ([email protected]) to schedule an appointment outside this time. Substantive matters are best discussed in person, but if you have a question about administrative matters, please feel free to email me.

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mailto:[email protected]

ASSIGNMENTS

I. Introduction to M&A

Subject Assignment Reading Assignment Cases/Case Studies/Problem Sets

Overview/The Time Warner Merger: A Case Study

1 CB: 1-14

HBS Case: 9-293-117

Time Inc.’s Entry into the Entertainment Industry (A)

II. Mergers


Transactional Forms and Voting/Appraisal Rights

2 CB: 33-42; 52; 415-419

Transactional Forms and Voting/Appraisal Rights (cont.)

3 MACMP: 47-51; 77-81; 731-733 (to the extent necessary to answer the questions in Problem Set No. 5)

Problem Set No. 1 (except Question B.2)

Problem Set No. 2*

Problem Set No. 5*

Appraisal Rights - Determining Fair Value

4 HBS (Darden) Case: UV0112 (pp. 1-4; 7-9; 14-20)

CB: 441 (introduction to §4.3 only); 452-453 (introduction to §4.3(B) only); 461-477

Methods of Valuation for Mergers and Acquisitions

Kleinwort Benson Limited v. Silgan Corporation

Gonsalves v. Straight Arrow Publishers, Inc.

Cavalier Oil Corp. v. Harnett

Kohler Co.: A Case Study 5 HBS Case: 9-205-034 Kohler Co. (A)

Ignore all MBCA-related sub-questions.3

III. Asset and Stock Acquisitions


Transactional Forms and Voting Rights

6 CB: 136-139; 165-168

MACMP: 59-61; 73-75

Problem Set No. 3

Problem Set No. 4*

Asset Sales – State Law Considerations

7 CB: 139-148 Gimbel v. The Signal Companies, Inc.

Katz v. Bregman

Hollinger Inc. v. Hollinger International, Inc.

IV. Federal Securities Laws and State Tender Offer Regulation


Federal Securities Laws 8 MACMP: 247-253 (through first paragraph); 257-260

CB: skim 75-93; skim 109-114; 126-134

Basic Incorporated v. Levinson

The Hewlett-Packard—Compaq Merger: A Case Study

9 HBS Case: 9-104-048

MACMP: 290; 302 (beginning with Note 2) – 306 (through the third paragraph)

Hewlett-Packard—Compaq: The Merger Decision

Federal Securities Laws (cont.))/State Tender Offer Regulation

10 MACMP: 361-365

CB: skim 183-188; skim 259-260; skim 261-273; skim 276-279; skim 302-307; 371 (introduction to §3.3 only); 394-401

The Acquisition of Consolidated Rail Corporation: A Case Study

11 HBS Cases: 9-298-006; 9-298-095 The Acquisition of Consolidated Rail Corporation (A)

The Acquisition of Consolidated Rail Corporation (B)

Ignore all MBCA-related sub-questions.4

V. Tax, Accounting and Antitrust Considerations


Tax Considerations 12 MACMP: 699-703

Supplemental Tax Materials (available on CTools)

The CoMark LBO: A Case Study

13 HBS Case: 9-202-090 Brazos Partners: The CoMark LBO

Accounting and Antitrust Considerations

14 CB: 16-18

Antitrust Materials (available on CTools)

VI. Fiduciary Duties Related to Takeover Defenses


American Cyanamid: A Case Study

15 HBS Cases: 9-898-120; 9-897-064 American Cyanamid (A) & (B) Combined

American Cyanamid (C): Epilogue

Introduction to Takeover Defenses

16 CB: 491-493; 501-520 (through first paragraph)

Legal Standards 17 CB: 522-523 (Introduction to §5.3 only); 536-546; 557-576

Unocal Corporation v. Mesa Petroleum Co.

Paramount Communications, Inc. v. Time Incorporated

Moore Corporation Limited v. Wallace Computer Services, Inc.

Legal Standards (cont.) 18 CB: 576-585 Blasius Industries, Inc. v. Atlas Corporation

Mercier v. Inter-Tel, Inc. (available on CTools)

Circon: A Case Study 19 HBS Cases: 9-801-403; 9-801-404; 9-801-405 Circon (A)

Circon (B)

Circon (C)

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VII. Fiduciary Duties in Sales of Control


Overview of Deal Protection Devices/Director Duties

20 CB: 611-613; skim 613-615; 615-617; skim 617-618; 618-620; skim 620-622; 622-624; skim 624-625; 625-626; 646-655; 685-704

HBS Case: 9-206-108

The Company Sale Process (background reading)

Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc.

Paramount Communications, Inc. v. Time Incorporated

Paramount Communications, Inc. v. QVC Network, Inc.

Director Duties (cont.) 21 CB: 626-630; 713-725 Lyondell Chemical Co. v. Ryan (available on CTools)

Omnicare, Inc. v. NCS Healthcare, Inc.

Director Duties (cont.) 22 In re: Netsmart Technologies, Inc. S’holders Litigation (available on CTools)

The Upper Deck Co. v. The Topps Co., Inc. (available on CTools)

In re: Lear Corp. S’holder Litigation (available on CTools)

VIII. Freeze-Out Transactions


Introduction/Fiduciary Duties 23 CB: 727-734 (through the introduction to §7.2 only); 769-798

Weinberger v. UOP, Inc.

Kahn v. Lynch Communication Systems, Inc. (1994)

Kahn v. Lynch Communication Systems, Inc. (1995)

Fiduciary Duties (cont.) 24 CB: 798-815 (through the second full paragraph)

Glassman v. Unocal Exploration Corporation

In re Pure Resources, Inc. Shareholders Litigation

In re CNX Gas Corporation Shareholders Litigation (available on CTools)

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IX. M&A Agreements


Letter of Intent/Confidentiality Agreement/The Merger Agreement

25 MACMP: 275; 277 (first two paragraphs only); 282 (beginning with Section 2)-289; 307-325; skim 847-849

Skim Sample Confidentiality Agreement (available on CTools)

The Merger Agreement (cont.) 26 MACMP: 325-351; 353-360; skim 851-856 In re IBP, Inc. Shareholders Litigation

X. Review

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m&a syllabus

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