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In economics and finance, arbitrage is the practice of taking advantage of a difference in prices in two or more markets – striking a combination of matching deals to capitalise on the difference, the profit being the difference between the market prices at which the unit is traded. When used by academics, an arbitrage is a transaction that involves no negative cash flow at any probabilistic or temporal state and a positive cash flow in at least one state; in simple terms, it is the possibility of a risk-free profit after transaction costs. For example, an arbitrage opportunity is present when there is the possibility to instantaneously buy something for a low price and sell it for a higher price.
A shareholder rights plan, colloquially known as a "poison pill", is a type of defensive tactic used by a corporation's board of directors against a takeover.
In business, a takeover is the purchase of one company by another. In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to the acquisition of a private company.
A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own stock of other companies to form a corporate group.
In finance, a convertible bond, convertible note, or convertible debt is a type of bond that the holder can convert into a specified number of shares of common stock in the issuing company or cash of equal value. It is a hybrid security with debt- and equity-like features. It originated in the mid-19th century, and was used by early speculators such as Jacob Little and Daniel Drew to counter market cornering.
Preferred stock is a component of share capital that may have any combination of features not possessed by common stock, including properties of both an equity and a debt instrument, and is generally considered a hybrid instrument. Preferred stocks are senior to common stock but subordinate to bonds in terms of claim and may have priority over common stock in the payment of dividends and upon liquidation. Terms of the preferred stock are described in the issuing company's articles of association or articles of incorporation.
Greenmail or greenmailing is the action of purchasing enough shares in a firm to challenge a firm's leadership with the threat of a hostile takeover to force the target company to buy the purchased shares back at a premium in order to prevent the potential takeover.
Mezzanine capital is a type of financing that sits between senior debt and equity in a company's capital structure. It is typically used to fund growth, acquisitions, or buyouts. Technically, mezzanine capital can be either a debt or equity instrument with a repayment priority between senior debt and common stock equity. Mezzanine debt is subordinated debt that represents a claim on a company's assets which is senior only to that of the common shares and usually unsecured. Redeemable preferred stock equity, with warrants or conversion rights, is also a type of mezzanine financing.
In business, a white knight is a friendly investor that acquires a corporation at a fair consideration with support from the corporation's board of directors and management. This may be during a period while it is facing a hostile acquisition from another potential acquirer or it is facing bankruptcy. White knights are preferred by the board of directors and/or management as in most cases as they do not replace the current board or management with a new board, whereas, in most cases, a black knight will seek to replace the current board of directors and/or management with its new board reflective of its net interest in the corporation's equity.
Lobsters are widely fished around the world for their meat. They are often hard to catch in large numbers, but their large size can make them a profitable catch. Although the majority of the targeted species are tropical, the majority of the global catch is in temperate waters.
Killer bees are firms or individuals that are employed by a target company to fend off a takeover bid. These include investment bankers (primary), accountants, attorneys, tax specialists, etc. They aid by utilizing various anti-takeover strategies, thereby making the target company economically unattractive and acquisition more costly. Corporations defend against these strategies using so-called 'shark repellents.'
Hybrid securities are a broad group of securities that combine the characteristics of the two broader groups of securities, debt and equity.
Equity value is the value of a company available to owners or shareholders. It is the enterprise value plus all cash and cash equivalents, short and long-term investments, and less all short-term debt, long-term debt and minority interests.
John P. Calamos, Sr. is a Greek-American businessman who founded Calamos Asset Management, which manages $35 billion in assets on behalf of institutions and individual investors, in 1977. A veteran of the Vietnam War, he served as a United States Air Force Bomber Pilot/ Forward Air Controller with more than 900 combat hours. Calamos received a bachelor's degree in business and economics from Illinois Institute of Technology in 1963 and an MBA in 1970, and currently serves on the IIT Board of Trustees. He also serves as Chairman of the National Hellenic Museum.
In economics and finance, market manipulation is a type of market abuse where there is a deliberate attempt to interfere with the free and fair operation of the market; the most blatant of cases involve creating false or misleading appearances with respect to the price of, or market for, a product, security or commodity.
Mubadala Investment Company PJSC, or simply Mubadala, is an Emirati state-owned holding company that acts as one of the sovereign wealth funds of the Emirate of Abu Dhabi. The company was established in 2017 when then-named Mubadala Development Company and the International Petroleum Investment Company (IPIC) merged.
In mergers and acquisitions, a mandatory offer, also called a mandatory bid in some jurisdictions, is an offer made by one company to purchase some or all outstanding shares of another company, as required by securities laws and regulations or stock exchange rules governing corporate takeovers. Most countries, with the notable exception of the United States, have provisions requiring mandatory offers.
Lawrence Warehouse Company was a business based in San Francisco, California, USA, which had an initial public offering in May 1936. The firm registered 20,001 shares of convertible preferred stock with the Securities Exchange Commission which was valued at $200,010.
The following is a glossary which defines terms used in mergers, acquisitions, and takeovers of companies, whether private or public.
Israel “Izzy” Englander is an American billionaire hedge fund manager. In 1989, he founded his hedge fund, Millennium Management, with Ronald Shear. The fund was started with US$35 million, and as of 2024 had US$61.1 billion in assets under management.
References
- ↑ Lobster Trap Definition: investopedia.com.
- ↑ Law of Business Formation Archived 2011-07-07 at the Wayback Machine : Stephen J. Spielman, International University of Sarajevo.
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