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Market for Corporate Control

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I need a description and an analysis of the market for corporate control and its implementations for financial organizations.

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Solution Summary

An examination of the market for corporate control. This a key topic that explains the historical impact of a company acquisition and the impact on the stock market. A company that is being acquired has options to prevent being taken over.

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I need a description and an analysis of the market for corporate control and its implementations for financial organizations.

The market of corporate controls includes mergers, acquisitions and reorganizations. The CEO is pressured to perform or face the possibility that the company will be sold to new owners as part of the market for corporate control. The board of directors may decide to sell the company to new owners instead of removing an executive. The sell will provide the company with more profitability because of changes through strategy changes, cost structure and capital structure. A new owner will pursue the sale if the company will gain more value than the old owners. The new owner that makes an offer is the acquirer and the company being receiving he offer is the target. Whenever the target desires to receive an offer, the acquisition is friendly, if not the offer is hostile. When the acquire makes offers directly to the target's shareholders to purchase their stock at a specific price, this is a tender offer. When the acquirer requests the target shareholders to elect their directors to approve the deal, this is a proxy contest.

There are three main reasons for a company to make an acquisition financial synergies, diversification and change of ownership. Financial synergies is obtained by the acquiring through higher profits via revenue improvements, ...

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