Mergers & Acquisitions Assignment

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Added on 2020-04-29

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This report is on "management of mergers and acquisitions". The article talks about the takeover offer of $1.2 Billion that Paris-based Accor Hotels offered to acquire Mantra group which is the second-largest hotel group in Australia. The regulatory framework set for acquisitions and takeovers is such that the corporation Act sets a threshold of 20% of the listed company in order to activate the takeover laws. The issue raised in the article is whether there are any huddles that the company may face when Acquiring the Mantra group.

Mergers & Acquisitions Assignment

Added on 2020-04-29

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1Takeovers and AcquisitionsName:Course Professor’s nameUniversity nameCity, StateDate of submission

2The article in review was written by David Chau for ABC News network on 9th October 2017. The article talks about the takeover offer of $1.2 Billion that Paris based Accor Hotels offered to acquire Mantra group which is the second largest hotel group in Australia. I have observed that there are regulations that have been put in place by the Australian government takeover panel when an acquisition or takeover involves a company that is listed in the Australian Stock Exchange. Mantra group has active stocks in the ASX and therefore there are requirements that Accor hotels are supposed to fulfill before acquiring the company.The regulatory framework set for acquisitions and takeovers is such that the corporation Act sets a threshold of 20% of the listed company in order to activate the takeover laws. In this case, Accor Hotel intends to acquire the whole of Mantra group (DePamphilis, n.d.).The issues raised in the article is whether there are any huddles that the company may face whenAcquiring Mantra group. The takeover laws set out in Chapter 6 of the corporations Act, regulatedirect or indirect acquisitions in Australian companies that are listed with more than 50 members. In particular the law sets out that no company can increase its voting power to more than 20% (Müller-Stewens, Kunisch and Binder, n.d.).There are exceptions to this rule which include acquisitions under a takeover that is formal whichtarget shareholders can participate. Second, the 20% rule does not include schemes of arrangement, acquisition with approval from a majority of the shareholders who are not parties of the transaction. Another exception is the acquisition of no more than 3% of the voting rights every six months(Turner and Trone, 2013). There is also downstream acquisition of shares in an Australian company that result from acquisition from upstream acquisition in companies listed on the ASX with approval by the Australian Securities and Investment commission.

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