Dr. Cai Berg, Senior Managing Director ParkView Partners and ValueTrust, has been interviewed by Activist Monitor and Deal Reporter on recent developments and a certain paradigm shift in public takeovers in > Show moreS
Dr. Cai Berg, Senior Managing Director ParkView Partners and ValueTrust, has been interviewed by Activist Monitor and Deal Reporter on recent developments and a certain paradigm shift in public takeovers in Germany.
“Successful closing of deals involving companies valued at more than EUR 1bn is down 28%, comparing the period from 2005 to 2017 with the two year period since.” said Berg. ParkView’s research (in collaboration with the HHL Leipzig) indicates that just 43% of deals in that top echelon have been successful since 2017 and the average total weighted cost of ownership is about 40% on top of the company’s undisturbed share price. On average, around 25% of that cost is represented by the initial takeover offer premium, an additional increase of 10% through the DPLTA, squeeze-out and delisting processes (the “back-end game”), and a further increase of 7% due to the court proceedings challenging those processes. Fewer shareholders participate in each round, hence the weighting towards the initial phases, according to ParkView’s research.
Cai Berg, along with Michael J. Ulmer, partner at Cleary Gottlieb Steen & Hamilton, agreed that the investment community’s growing visibility of the capital flowing through this backend game is one reason for the difficulty in getting such a deal successfully completed. They also agreed that however, it is not really possible to completely protect against event-driven interlopers, so it’s more about mitigating their presence. In order to understand the risks, deal parties first need to be able to put a price tag on the respective steps from initial premium to legal actions.
For more information, please download the interview.
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