Takeover contingency

AWR Lloyd advises listed clients with high free floats on takeover contingency strategy. We first assess how potential predators might approach a takeover – for example via a ‘bear hug’ approach, an initial strategic minority position or via a direct all-out hostile takeover offer. We then assess who the potential predators might be and profile them (trackrecords re value creation, M&A pricing, governance…). We can prepare contingency ‘negative PR’ and IR action plans on this basis.

AWR Lloyd then focuses on the company’s own internal valuation and the fundamental value which the company plans on delivering over the next five years or so. We assess where the company’s share price stands in comparison with these valuations and develop investor relations and restructuring strategies to try and push the share price closer to these value targets.

We help our clients prepare and draft outline defense investor roadshow presentations including management trackrecord in value creation and governance, the company’s current strategic plan and new positive disclosures.

We agree a takeover offer ‘Decision Matrix’* with our clients and prepare possible litigation and regulatory defense actions, white knight contingencies, poison pill strategies and stakeholder protection contingency plans (e.g. parachutes and ESOP schemes).

AWR Lloyd can help clients prepare and think through takeover scenarios by using ‘wargame’ simulation workshop techniques.

*Note: Takeover Contingency Decision Matrix is a proprietary AWR Lloyd analytical and strategic tool.

For example

AWR Lloyd worked for a large listed Asian energy company with a high free float.

We advised on potential predator strategies, potential predator profiles, valuation dynamics, investor relations strategies, Decision Matrix, restructuring plans and various contingency measures.

The client has implemented some of our recommendations and is considering implementing others.

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