Raising finance – Vocabulary and Phrases
alliance – a merging of efforts or interests by persons, families, states, or organizations
Warner Lambert said it entered an alliance with Boots to co-promote two new drugs.
joint venture – a business enterprise in which two or more companies enter a temporary partnership.
Saudi Arabian and Japanese officials agreed on a joint venture to build oil refineries in both countries.
LBO (leveraged buyout) – buying a company using a loan borrowed against the assets of the company that's being bought
With debt taken on in a $4.9 billion leveraged buyout, Southland could not afford to pay all its bills.
MBO (management buyout) – when a company's top executive s buy the company they work for
Commodore is to be relaunched following a management buyout of its Dutch manufacturing plant.
merger – a statutory combination of two or more corporations by the transfer of the properties to one surviving corporation
The companies will merge their cellular phone operations, forming one of the nation's largest regional systems.
takeover – an acquisition or gaining control of a corporation through the purchase or exchange of stock.
To avoid a takeover, Carbide went deeply in debt to pay a huge special dividend.
hostile takeover – an acquisition or gaining control of a corporation through the purchase or exchange of stock.
Corporate Partners bought the $300 million of Polaroid preferred stock to help them avoid a hostile takeoverattempt by Shamrock Holdings, Inc.
friendly takeover – A situation in which a target company's management and board of directors agree to a merger or acquisition by another company.
Management described the move as a friendly takeover and said Crossair would remain an independent concern.
make an acquisition – to take over a company
Sales from a recent acquisition increased revenue to $4.97 billion.
predator – a company which takes advantage of another company weaker than itself, for example by trying to buy it
Speculation mounted that the brewery was the focus of a predator.
white knight – a corporation, a private company, or a person that intends to help another firm.
Morgan has been looking for a white knight since insurance broker Willic Faber announced it was selling its 20% stake in the company.
black knight – unfriendly bidder in an acquisition
While not particularly welcome, the black knight is considered more favourably than the hostile bidder.
prey – the target company in a takeover
MIN would prefer to be predator rather than prey, but it was outbid in its last attempt to buy a regional newspaper.
to be/fall prey to sth. – to be unable to avoid a harmful or difficult situation
The once soaring South Korean economy has fallen prey to steep wage increases and high inflation.
poison pill – a defensive action taken to repel a raider, such as changing the share voting structure or the board of directors, or spending all the company's cash reserves
Eljer's poison pill anti-takeover measure prevents a group from purchasing more than 10% of the company's stock.
divestment/to divest – reduction of some kind of asset for either financial goals. A divestment is the opposite of an investment.
We fulfilled our commitment to shareholders to divest Ultramar's downstream business by creating a new company.
dispose of/disposal – to get rid of; discard, to do away with; destroy
Most of these properties will be disposed of over the next five years.
stake – a share of ownership of a company; money risked or invested in business
Cable and Wireless has but its stake in Digital Telecommunications Pholippines to 25% from 40%.
a majority stake – when more than 50 per cent of the shares of a company are owned by one investor, giving them control over how it is run
Canada and Mexico refused to allow foreign companies to hold majority stakes in their main telephone companies.
a minority stake – when an investor owns less than 50 per cent of the shares of a company
The company is negotiating the purchase of a minority stake in the French airline, TAT.
conglomerate merger – A merger between firms that are involved in totally unrelated business activities.
Since conglomerate mergers involve companies with completely independent products, there are few opportunities for a reduction in production costs.
horizontal merger – A merger occurring between companies producing similar goods or offering similar services
This horizontal merger put two regional electricity companies together.
vertical merger – A merger between two companies producing different goods or services for one specific finished product.
It was a vertical merger of British Telecom with Mitel, an equipment maker.
unwieldy conglomerate – a holding company with a large number of subsidiaries, which may not be easy to manage profitably as a group
Tyco International Ltd. transitioned yesterday from an unwieldy conglomerate into three separate, public companies that are tightly focused on health care, electronics and security products.
to build up capital – to accumulate capital
A salesman must first build up a network of contacts.
sell off – an act or instance of liquidating assets or subsidiaries
The business reduced its debts by selling off assets.
spin off – The creation of an independent company through the sale or distribution of new shares of an existing business/division of a parent company.
After the acquisition, the company was required to spin off about a third of its assets.
non-core assets – side, less important
Since 1990, management has devoted substantial resources to reducing the Company's Non-Core Assets.
core activity – the central, innermost, or most essential part of business
Chrysler wants to sell off its $1 billion technology arm to concentrate resources on its core business.
diversify into – spreading investments around into many types of investments, including stocks, mutual funds, bonds, and cash.
Singapore has diversified into a wider range of industries.
synergy – belief that together the companies will produce more that the sum of the two separate parts.
The company could benefit from cost savings, as well as synergies from combining their manufacturing activities.
economies of scale – The increase in efficiency of production as the number of goods being produced increases, Typically, a company that achieves economies of scale lowers the average cost per unit through increased production since fixed costs are shared over an increased number of goods.
Toys'R'Us buys massive quantities directly from manufacturers and has gigantic store with huge economies of scale.
target firm – A firm that has been targeted by another firm for a takeover, because it possesses large cash reserves, undervalued real estate or otherwise huge potential.
The drug company has struggled in recent years to develop major new pharmaceutical products, and it long has been rumoured to be a takeover target.
sleeping beauty – A company that is prime for takeover but has not been approached by an acquiring company, even though it has large cash reserves, undervalued real estate, or huge potential.
The technology has huge potential and is currently considered a sleeping beauty.
bear hug – An offer made by one company to buy the shares of another for a much higher per-share price than what that company is worth. A bear hug offer is usually made when there is doubt that the target company's management will be willing to sell.
The surest way to get a bear hug is to start negotiating a sale when your heart’s not into it
sweetheart deal – A merger, a sale or an agreement in which one party in the deal presents the other party with very attractive terms and conditions. The terms of a sweetheart deal are usually so lucrative that it is difficult to justify turning the offer down.
Critics say prosecutors gave him a sweetheart sentence in return for evidence against his partner.
raider – An individual or organization who tries to take over a company by initiating a hostile takeover bid.
In a successful raid on Emhart Corp, the Fisher-Getty partnership earned a $50 million investment profit