PRIVATE EQUITY & VENTURE CAPITAL

• Mid-Range Deals Take Private Equity's Center Stage

  Abstracted from: Where The Deals Are
  By: Danielle Fugazy

  Dealmaker - June/July 2008, Pgs. 87-91

  The current tight credit market means companies can no longer rely on cheap equity to fund big deals. Fully leveraged megadeals have evaporated, but those under $1 billion are still moving. As the big houses move into the middle market, smaller players may be pushed out. Danielle Fugazy reports on that, creative financing, and other consequences.

• Banks Use Venture Capital To Cross-Sell For Future Business

  Abstracted from: Building Relationships Early: Banks In Venture Capital
  By: Prof. Thomas Hellmann, Prof. Laura Lindsey, and Prof. Manju Puri University of British Columbia (TH); Arizona State University (LL); Duke University and National Bureau of Economic Research (MP)

  Review of Financial Studies - Vol. 21, No. 2, Pgs. 513-541

  Bankers make private equity investments in startups both to earn a profit and to establish a relationship for lending in the future. Research by finance professors Thomas Hellmann, Laura Lindsey, and Manju Puri shows that the startup benefits as well. Given the evidence, late-stage startups that anticipate a need for debt in the future might want to add a bank to their venture investors.

MERGERS & ACQUISITIONS

• Strengthening Protection For Shareholders Raises Merger Premiums

  Abstracted from: The Value Of Investor Protection: Firm Evidence From Cross-Border Mergers
  By: Prof. Arturo Bris and Prof. Christos Cabolis IMD International and European Corporate Governance Institute, Lausanne, Switzerland (AB); ALBA Graduate Business School, Athens, Greece (CC); Yale International Center for Finance (AB and CC)

  Review of Financial Studies - Vol. 21, No. 2, Pgs. 607-648

  Being acquired generally converts a cross-border target into a national of the acquiror's home country, changing its accounting, governance, and disclosure practices. The switch also broadens or narrows the legal protections covering the target's shareholders. Business and finance professors Arturo Bris and Christos Cabolis explain how the change impacts market perception of the target's value.

GLOBAL MARKETS

• Tips On Mining Cross-Border M&A Opportunities

  Abstracted from: The Era Of Cross-Border M&A: How Current Market Dynamics Are Changing The M&A Landscape
  By: Marc Zenner, Matt Matthews, Jeff Marks, and Nishant Mago J.P. Morgan Chase & Co.

  Journal of Applied Corporate Finance - Vol. 20, No. 2, Pgs. 84-96

  Although the credit crunch is clamping down on domestic M&A, cross-border action is jumping. Both long-term and short-term forces, ranging from deregulation to the US dollar's relative weakness, are driving the market. Capital advisors Marc Zenner, Matt Matthews, Jeff Marks, and Nishant Mago remind dealmakers of the unique risks and challenges of cross-border dealmaking.

• Sovereign Wealth Funds Raise Concern Among Regulators

  Abstracted from: The Rise And U.S. Invasion Of Sovereign Wealth Funds: A Growing Source Of Concern
  By: Joseph Fleming, Christopher Christian, and Maureen Magner Dechert, Boston MA

  Review of Securities & Commodities Regulation - Vol. 41, No. 13, Pgs. 153-160

  Sovereign wealth funds from the Middle East and Asia, particularly China, are pumping billions into Western financial institutions, providing much-needed global liquidity. Yet attorneys Joseph Fleming, Christopher Christian, and Maureen Magner warn that these funds (and their sovereigns) may hold too much control over the US economy and could exercise that influence for political purposes.

SECURITIES OFFERINGS

• Avoiding Pitfalls When Drafting Registration Rights Agreements

  Abstracted from: Key Considerations In Drafting A Registration Rights Agreement From The Company's Perspective
  By: Valerie Ford Jacob, Stuart Gelfond, Michael Levitt, and David Kanarek Fried Frank Harris Shriver & Jacobson, New York NY

  Review of Securities & Commodities Regulation - Vol. 41, No. 10, Pgs. 113-122

  For attorneys Valerie Ford Jacob, Stuart Gelfond, Michael Levitt, and David Kanarek, the devil's in the details when drafting a registration rights agreement. Highlighting the difficulties fostered by an overly generous grant of rights, they encourage issuers to negotiate against allowing pre-IPO investors to require or participate in subsequent registered sales of securities.

BANKRUPTCY & INSOLVENCY

• Cheap Assets, But Few Buyers

  Abstracted from: Under The Hammer

  The Economist - July 12, 2008, Pgs. 81-83

  Conditions in the financial markets are foreboding, although The Economist sees one silver lining: at least the fire sale of financial assets has produced a steady stream of fees. Banks are bracing for more stringent capital and liquidity requirements as they try to shore up weak balance sheets. Many of the bigger institutions have no desire to stretch already-thin capital bases, but they may have no choice.

• Surviving Corporate Restructuring, Before And After Chapter 11

  Abstracted from: Mastering The Turnaround
  By: Vincent Ryan

  CFO - July/August 2008, Pgs. 63-68

  Not every company filing for Chapter 11 bankruptcy will succeed in exiting as a strong, going concern. While avoiding bankruptcy may be admirable and perhaps advisable, Vincent Ryan nevertheless does not rule out Chapter 11 as a last resort. Strategic planning before, during, and after a turnaround is key.