A lawyer’s job
In M&A transactions, lawyers are naturally inclined to draft and negotiate agreements that put our clients in a strong legal position. That is our job. For a buyer, it may mean providing for the following in the sale and purchase agreement (SPA): – solid representations and warranties by the seller …
Consistency in drafting
Consistency. Consistency matters a lot when drafting agreements. I was half amused and half exasperated when I saw an amended draft shareholders’ agreement which stated that shareholders may exercise certain rights by giving notice to the other shareholders. The next clause stated that the shareholders shall give notice to the …
M&A: Key issues to look out for in respect of contracts entered by target companies
Instead of a full legal due diligence report which sets out salient terms of contracts entered by the target companies, some buyers prefer to have a red flag report, which only highlights legal issues. In respect of contracts entered by the target companies, a red flag report may cover the …
Learning the trade-transactions by transactions
I was involved in an initial public offering (IPO) and listing of a company (with subsidiaries) in the early stage of my career. That listed group then went on to acquire several companies and businesses through shares and assets acquisitions, which I was involved in. The terms for the consideration …
M&A: Term sheet in M&A transaction
𝘜𝘴𝘦 𝘢 𝘵𝘦𝘳𝘮 𝘴𝘩𝘦𝘦𝘵 𝘧𝘰𝘳 𝘵𝘩𝘪𝘴 A term sheet is used in M&A transaction to set out the key commercial terms such as price, basis for price adjustment, earn out, profit guarantee and execution of new employment agreements with key employees of the target entity. The term sheet may be …
M&A: Certainty of terms
It drives me a bit crazy sometimes when parties to transaction agreements request for ambiguous provisions to be included into agreements. By that I mean provisions which beg one or a combination of the following questions: -What needs to be done to achieve the desired result? -Who is responsible? -How …
M&A: Shareholders’ Rights
Preparing a shareholders’ agreement for an M&A transaction requires an in-depth understanding of shareholders’ rights and powers under the laws and the relationship between the shareholders. The table below sets out some of the rights and powers in respect of different levels of shareholding in a private company* limited by …