Mergers & Acquisitions Assignment

Added on - 29 Apr 2020

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1Takeovers and AcquisitionsName:CourseProfessor’s nameUniversity nameCity, StateDate of submission
2The article in review was written by David Chau for ABC News network on 9thOctober 2017.The article talks about the takeover offer of $1.2 Billion that Paris based Accor Hotels offered toacquire Mantra group which is the second largest hotel group in Australia. I have observed thatthere are regulations that have been put in place by the Australian government takeover panelwhen an acquisition or takeover involves a company that is listed in the Australian StockExchange. Mantra group has active stocks in the ASX and therefore there are requirements thatAccor hotels are supposed to fulfill before acquiring the company.The regulatory framework set for acquisitions and takeovers is such that the corporation Act setsa 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 50members. In particular the law sets out that no company can increase its voting power to morethan 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 ofarrangement, acquisition with approval from a majority of the shareholders who are not partiesof the transaction. Another exception is the acquisition of no more than 3% of the voting rightsevery six months(Turner and Trone, 2013). There is also downstream acquisition of shares inan Australian company that result from acquisition from upstream acquisition in companieslisted on the ASX with approval by the Australian Securities and Investment commission.
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