Hostile Takeover

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  • Topic: Takeover, Stock, White knight
  • Pages : 10 (4486 words )
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  • Published : March 12, 2013
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Introduction
There has been a great wave of M&A transaction taken place in Europe. The volume of M&As by European companies is similar to the United States. The mergers and acquisitions marker in Europe continues its slow recovery in the fourth quarter and there is an improvement estimated by most of the bankers despite persistent concerns over Europe’s financial health. [1] M&As in Europe has increased largely in number of deals (2843 deals announced) and total transaction value ($1,383.10 billion) compared to past decades between 2001 and 2007. [2] Part of above mentioned trend was there due to the introduction of the Euro, the globalization process, technological innovation, deregulation and privatization, as well as the financial markets’ boom and the surge in liquidity. [2] According to Dealogic, there were $228 billion of takeover deals with a European target announced in the quarter through Dec 30, up to 11% from the same period a year earlier. [1] Definitions and key terms

According to Leonov (2000), “hostile takeover” is understood to be an attempt to obtain control over the financial and business activity or assets of a target company against the resistance of management or key participants in the company. Analysis of publications in the business press suggests that the most widespread types of raiding, in terms of the strategies used to carry out the scheme, are: the hostile takeover of companies that possess rights to attractive assets; acquiring control over assets by means of bankruptcy proceedings; disputing rights to assets in the courts; compelling the victim to conclude a deal concerning certain assets, lobbying various state bodies by conspiring with state employees. [3] Europe zone include Albania, Andorra, Armenia, Austria, Azerbajian, Belarus, Belgium, Bosnia and Herzegovina,Bulgaria, Croatia, Cyprus, Crech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, Ireland, Italy, Kazakhstan, Latvia, Liechtenstein, Lithuania, Luxembourg, Macedonia, Malta, Moldova, Monaco, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, Russia, San Marino, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, Vatican City and United Kingdom. Europe Hostile Takeover Case- Redline vsArtnet

Company Background
Artnet, an international transaction platform for the art market, enables fast transactions at low costs and provides a global overview of the market. Artnet opened up for the B2C market from B2B Company after 20 years existing. In addition, it operates a qualified C2C business on Artnet Auctions. This dynamism creates its own cycle. The Artnet information services provide the competitive edge for Artnet Auctions. The participants in the auctions are potential new buyers in Artnet Galleries as well as potential new subscribers to other Artnet products. Art collectors can not only make purchases on Artnet Auctions—they can also make their own sales. [11] As a result, Artnet is synonymous with efficient art sales on the Internet for both art professionals as well as private collectors. [11] Redline’s chairman is Russian billionaire Vladimir Evtushenkov, who controls Moscow-based investment company Sistema JSFC. (AFKS)Sistema owns majority shares in OAO Mobile TeleSystems, Russia’s largest mobile-phone operator, and the oil producer and refiner OAO Bashneft. (BANE)Sistema also controls about 49 percent of Russian oil producer OAO Russneft. [4] Reason

Artnet is well known with its auction price database which helps set a sort of “blue book value” for art. [5] It lists all the prices artists, works achieved at auction and all international auction results of the past 20 years. Redline also attracted by Artnet’s Gallery network as it is one of the profit centers of Artnet. [6] Artnet is leading the whole art auctions on Internet, and it is growing by 23% per year which Artnet sells 70 lots of art work per week. [4] Artnet also introduced the...
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