ipl-logo

Takeover Defenses-A Case Study Of Circon

958 Words4 Pages

Chapter 4: Takeover Defenses- A case study of Circon In this chapter, takeover defenses mechanisms are explained with the example of Circon, a medical device maker company. Defenses against hostile takeovers A hostile takeover can be defended in various ways. Those effectively built-in defensive measures are called ‘shark repellent’. Golden Parachute or "change-in-control benefits” In case of acquisition top brass like CEOs will get a hefty bonus which makes acquisition expensive and less attractive. On the flipside CEO can continue to run company inefficiently and make it attractive for acquisition. Golden handshake is the provision for paying severance package due to pre-term termination. Silver Parachute is similar to Golden Parachute …show more content…

During the initial years Circon commanded monopoly in new market of video systems for surgery. The acquisition of ACMI corporation in 1986 had turned out as a huge success. In 1995, Auhll acquired Cabot Corporation through a competitive bidding process. But Circon experienced losses as a result of Cabot acquisition and its stock price fell. In 1996 , U.S. Surgical made a tender offer of $18 cash per share. Auhll urged “poison pill” which will make acquisition prohibitively expensive for Surgical to acquire more than 15 % stake in Circon without the approval of Circon’s board. In addition, Circon adopted a staggered board, “golden parachute”, “silver parachute”, “broken through”, “Single trigger” and “Double trigger” pay out. As a result, regardless of the shareholder’s support, takeover attempt failed. Auhll packed the Circon’s board with his friend including Goerge Cloutier his Harvard section mate and hired investment banker and lawyer who were in Auhll’s acquaintance. U.S. Surgical continued to renew the offer with $17 and 16.5 per share respectively in 1997 and Circon continued to reject offer as inadequate. In the meantime, Auhll had lost board election to Surgical nominees. But after sometime he came back to board with help of section mate Cloutier. Auhll waited for the white knight or white squirrel as fortune didn’t come back to Circon. Circon was also unable to find strategic buyer who could pay more than $16.5 per share. Eventually everyone lost faith in CEO’s promise. In 1998, Tyco international acquired U.S. Surgical leading an end to the takeover battle. Circon’s stock fell to $7.94 per share. And the dissident board unseated

Show More
Related

Gl Consulting Case Summary

919 Words | 4 Pages

Specifically, junior partners would have to invest about 80% of their annual bonus, instead of the 30% they previously had invested. Hertach believed that the senior partners organized a system that would allow them to cash out, potentially draining GLC’s capital, thus adversely affecting Hertach through the financial risks and obligations this proposal would carry. While he would be $250,000 richer on paper, he would have to stay longer with the firm to have the shares vest. While Hertach voiced his opinions and opposition openly, he carried very little influence, as he was only a junior partner.

Read More

How Did The Hudson's Land Affect Society

1004 Words | 5 Pages

From that point on, there were many drastic changes to the HBC that we can say influenced the future development of the company. The decisions that the company’s leaders made after

Read More

Corinthian College Fraud Case Study

1649 Words | 7 Pages

What happened to Cause the Closer of Corinthian Colleges In 2015 Corinthian Colleges closed their doors and left several students looking for answers. Corinthian which owned Everest, Heald College and WyoTech closed its doors after allegations of fraud and a loss in government founding. One of the leading contributors to this collapse was the loss in funding by the federal government and several lawsuits claiming fraudulent job placement claims and consumer complaints (Bernick, 2015). There were also allegations that claimed that Corinthian was using predatory lending practices in low income communities to gain more students (Douglas-Gabriel,2015).

Read More

Snc's Briefing Case

181 Words | 1 Pages

Candidate Shealy was able to brief an almost complete five paragraph order with a calm and confident delivery. SNC did not brief admin and logistics or command and signal but briefed all other paragraphs. During the briefing, he made eye contact with his fire team and had grabbed each member while tasking them to ensure they knew he was addressing them directly and also oriented them to the problem by showing it to them during the brief. The quick transition from the brief to execution demonstrated the clarity and quality of SNC’s briefing. While negotiating the obstacles, SNC continuously requested feedback from his fire team members and included them in his next decision.

Read More

Case Study: Coca-Cola Co. V. Koke Company

287 Words | 2 Pages

Coca-Cola Co. v. Koke Co. of America, 254 U.S. 143 (1920) U.S. Sup. Ct. Facts: 1886 marked the invention of a caramel-colored soft drink created by John Pemberton. Coca-Cola got its name after two main ingredients, coca leaves and kola nuts. The Coca-Cola Company is suing Koke Company of America from using the word Koke on their products. They believe Koke Company of America is violating trademark infringement and is unfairly making and selling a beverage for which a trademark Coke has used.

Read More

Bethany Hamilton: Most Feared Animals In The Titanic

333 Words | 2 Pages

Bethany Hamilton Did you know sharks are the most feared animals in the ocean? Bethany Hamilton was just 13 when she was attacked by a shark off the shore of Kauai Hawaii in 2003. She was surfing with one of her friends and her friends dad was also there. And all of a sudden a 15 foot tiger shark snuck up on Bethany, and bit off her left arm.

Read More

Uniform Rental Company Case Study Cintas

738 Words | 3 Pages

As far as risks, Cintas is a large uniform rental company that has been in business since 1965 and has grown tremendously with uniforms and apparel, restroom supplies, and safety mat service, as well as first aid for more than 900,000 customers. Cintas has a long-term portfolio considering that it performs quietly and has the modest dividend and no major activist holdings. If there should be any risk, it would be that the companies have a big turnover and losing their contracts and this would result in the company closing. This in turn will result in Cintas losing significant client accounts and the price of stock will go down. Since Cintas has a large division of first aid, safety and fire protection services will help them to stay afloat.

Read More

Swot Analysis Of Stryker Corporation

965 Words | 4 Pages

Luckily, Stryker can reduce the bargaining power of buyers by creating a large customer base. Stryker can also combat this through the innovation of new products and services, and in turn this will deter customers from going to Stryker’s competitors. Threats of New Entrants As new entries emerge into the Medical Devices and Equipment industry, it brings new innovations and pricing strategies. Stryker can try and counteract new entrants by being innovative themselves, lowing their fixed cost per product, continuing to pour money into research and

Read More

The Pros And Cons Of Antitrust Laws

1078 Words | 5 Pages

The purpose of this paper is to explain the reasons behind “no poaching” agreements to protect employees in the new economy. This analysis has been done by examining the article written by Michael M. Briley from Shumaker, Loop & Kendrick, LLP, business law firm founded in 1925. This article examines the potential violations of the antitrust laws. The second part of the paper focuses on the challenges and opportunities of offsite interviews and offsite tastings, particularly this paper stresses on the opportunities that technology is bringing to this new era. Companies have tried to support a strong interest in keeping their most valuable employees, as a result, they support their key employees.

Read More

Buffett Case Study

1327 Words | 6 Pages

At the same time, after the bid news release, MEG’s stock will be expected to increase. Marshall Morton has been MEG’s CEO since 2005, and Exhibit 6 shows that there existed 6 employee stock options from 2005 to 2011. Once MEG turns the business around, Marshall Morton would benefit a lot from the stock increase, not to mention rebuilding all shareholders’ confidence on

Read More

Income Smoothing Case Study

1491 Words | 6 Pages

This proves that throughout the case, Cendant Corporation wasn’t acting fully ethical nor with the desired fiduciary actions to their investors and the auditing team in this case being Ernst&Young. Aside from the trust being broken apart between both, there was never a sign of an internal control inside Cedant. Therefore, there shows that the corporate governance for Cendant Corporation didn’t have signs of existence as well. Most frauds that were occurring before the implementation of the SOX-2002, had top management such as in Cendant that didn’t have care for the ethical performances as much as in today’s corporate world with more regulations in hand by the government. At the end, Cendant had filings against them concerning their corporate governance

Read More

Pan Europa Case Study

1078 Words | 5 Pages

Answer 1) Strategically, what must Pan-Europa do to keep from becoming the victim of a hostile takeover? Considering the current financially bearish trend in Pan Europa, the entity needs to work on multiple yet chain corporate activities to avoid hostile takeover. Below are some strategies, which can be used by the company: i)

Read More

HCG Business Model

867 Words | 4 Pages

It also diversified its revenue base with centralized procurement. It was taken over by AstraZenece Plc in

Read More

Case Study: Linkedin Acquisition

1057 Words | 5 Pages

LinkedIn Acquisition 1. What in your assessment are the most significant reasons driving Microsoft's purchase of LinkedIn? (250 words max) Ans 1) 1. Focus on enterprise software space: Microsoft has many in this regard ranging from Windows, Office 365, and Office Suite. Microsoft has utilized assets such as their surface tablets and Skype Communications into professional use-cases like Hololens.

Read More

Oligopoly Case Study

1870 Words | 8 Pages

1.0 INTRODUCTION In an economy, there exists different market structures to accommodate different industries and firms. This study will be made to understand in further depth the market power of different market structures, and in particular an example of using case studies of agricultural sector of the French markets to explain how an ideal perfectly competitive market works. This will then be further strengthened with several references linked to the case study. 1.1 Monopoly market

Read More

More about Takeover Defenses-A Case Study Of Circon

Related Topics

Open Document