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Due Diligence

Due Diligence for M&A transactions

๐—œ๐—ป๐—ณ๐—ผ๐—ฟ๐—บ๐—ฎ๐˜๐—ถ๐—ผ๐—ป ๐˜„๐—ต๐—ถ๐—ฐ๐—ต ๐—ฏ๐˜‚๐˜†๐—ฒ๐—ฟ ๐—ฐ๐—ฎ๐—ป ๐—ด๐—ฒ๐˜ ๐—ณ๐—ฟ๐—ผ๐—บ ๐—ฑ๐—ถ๐—ฟ๐—ฒ๐—ฐ๐˜๐—ผ๐—ฟ๐˜€โ€™ ๐—ฎ๐—ป๐—ฑ ๐˜€๐—ต๐—ฎ๐—ฟ๐—ฒ๐—ต๐—ผ๐—น๐—ฑ๐—ฒ๐—ฟ๐˜€โ€™ ๐—บ๐—ถ๐—ป๐˜‚๐˜๐—ฒ๐˜€/๐—ฟ๐—ฒ๐˜€๐—ผ๐—น๐˜‚๐˜๐—ถ๐—ผ๐—ป๐˜€ ๐—ผ๐—ณ ๐˜๐—ฎ๐—ฟ๐—ด๐—ฒ๐˜ ๐—ฐ๐—ผ๐—บ๐—ฝ๐—ฎ๐—ป๐˜† โ€ข Whether shares have been properly issued with shareholdersโ€™ approval? โ€ข Has the target company circulated annual financial statements to shareholders? โ€ข Have the directors approved any unusual dividends? โ€ข Where a director is interested in a …

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Lawyering

Lord of the Rings and lawyering

โ€œ๐˜ž๐˜ฉ๐˜ฆ๐˜ณ๐˜ฆ ๐˜ฅ๐˜ช๐˜ฅ ๐˜บ๐˜ฐ๐˜ถ ๐˜จ๐˜ฐ ๐˜ต๐˜ฐ, ๐˜ช๐˜ง ๐˜ ๐˜ฎ๐˜ข๐˜บ ๐˜ข๐˜ด๐˜ฌ?’ ๐˜ด๐˜ข๐˜ช๐˜ฅ ๐˜›๐˜ฉ๐˜ฐ๐˜ณ๐˜ช๐˜ฏ ๐˜ต๐˜ฐ ๐˜Ž๐˜ข๐˜ฏ๐˜ฅ๐˜ข๐˜ญ๐˜ง ๐˜ข๐˜ด ๐˜ต๐˜ฉ๐˜ฆ๐˜บ ๐˜ณ๐˜ฐ๐˜ฅ๐˜ฆ ๐˜ข๐˜ญ๐˜ฐ๐˜ฏ๐˜จ. ๐˜›๐˜ฐ ๐˜ญ๐˜ฐ๐˜ฐ๐˜ฌ ๐˜ข๐˜ฉ๐˜ฆ๐˜ข๐˜ฅ,’ ๐˜ด๐˜ข๐˜ช๐˜ฅ ๐˜ฉ๐˜ฆ. ๐˜ˆ๐˜ฏ๐˜ฅ ๐˜ธ๐˜ฉ๐˜ข๐˜ต ๐˜ฃ๐˜ณ๐˜ฐ๐˜ถ๐˜จ๐˜ฉ๐˜ต ๐˜บ๐˜ฐ๐˜ถ ๐˜ฃ๐˜ข๐˜ค๐˜ฌ ๐˜ช๐˜ฏ ๐˜ต๐˜ฉ๐˜ฆ ๐˜ฏ๐˜ช๐˜ค๐˜ฌ ๐˜ฐ๐˜ง ๐˜ต๐˜ช๐˜ฎ๐˜ฆ?’ ๐˜“๐˜ฐ๐˜ฐ๐˜ฌ๐˜ช๐˜ฏ๐˜จ ๐˜ฃ๐˜ฆ๐˜ฉ๐˜ช๐˜ฏ๐˜ฅ,’ ๐˜ด๐˜ข๐˜ช๐˜ฅ ๐˜ฉ๐˜ฆ.โ€ I have always liked the exchange above between Thorin and Gandalf from J.R.R. Tolkienโ€™s …

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Mergers and acquisitions
Linkedin Post

Binding clauses for term sheet

The first document that I usually draft for an M&A transaction is the term sheet (sometimes referred to as the letter of intent/ heads of agreement/ memorandum of understanding). The purpose of a term sheet is to serve as a framework for drafting the definitive sale and purchase agreement. A …

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Linkedin Post

M&A: What to include in condition precedent clause

In a sale and purchase agreement for an M&A transaction, a condition precedent is a condition which must be fulfilled in order for the sale and purchase to proceed. A clearly drafted condition precedent clause should include the following: 1. What is the desired outcome/condition precedent to be fulfilled? 2. …

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Lawyering

Lawyering

I sighed inwardly when I was greeted with three forms to fill when I attended my dental appointment. There was a form to fill in personal data, a privacy consent form and a questionnaire about medical history. The last form was a two-page questionnaire with โ€˜answer yes/noโ€™ questions squeezed into …

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Linkedin Post

M&A: Safeguards for buyers

In an M&A transaction, a purchaser may find that well-drafted representations, warranties and indemnities provided by the seller are not particularly helpful if the seller does not have the financial means to pay damages or honour the indemnities. Four ways to avoid this: 1. The seller to provide bank guarantee …

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Company Law

Nominee directorโ€™s duty

In an M&A transaction where the sale and purchase of shares is not for the entire issued share capital of a company, it is prudent for shareholders to enter into a shareholdersโ€™ agreement to govern their relationship. The shareholders would typically want the right to nominate their representatives to be …

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Lawyering

Corporate law: More than just business

I decided early in my career that I would not go into practice areas which are more โ€œpersonalโ€. Corporate laws seemed to be a more neutral choice. I probably got this wrong. *** One of the transactions I was involved in gave me a different insight. The vendors sold their …

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Linkedin Post

M&A: Plan ahead for signing

In M&A transactions, when parties are busy negotiating the terms, planning for the signing of the transaction agreements may be the last thing on their mind. Plan ahead for signing. 1. What needs to be delivered to the counterparty upon execution of the transaction agreements? 2. Ensure the resolutions which …

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Lawyering

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 …

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