Preamble: This is the fifth entry in my deep dives sponsored by Tegus series. The goal of these are simple: every month, Tegus is going to give me a few expert interviews and I’m going to use those to dive into an investing topic. Some months, it could just be a dive into a specific company; other months, it might be a dive into an industry. You can find the
Great writeup. in regards to Section 5, financing and insolvency out, why is the provision below not all that needs to be said?
“Notwithstanding anything contained in this Agreement to the contrary, the Equity Investor, Parent and Acquisition Sub each acknowledge and affirm that it is not a condition to the Closing or to any of its obligations under this Agreement that the Equity Investor, Parent, Acquisition Sub and/or any of their respective Affiliates obtain any financing (including the Debt Financing) for any of the transactions contemplated by this Agreement.”
It says in no uncertain terms imo, whatever the rest of the agreement says, financing is not a condition to closing. So, what am I missing that all of these attorneys and legal experts are digging deep into the language on a $1 billion breakup free or an insolvency certificate when the agreement seems crystal clear on the subject? I feel like I must be missing something.
Great recap. I had the same thoughts re the risks of taking an premature victory lap.
I agree that the deal will likely close on the agreed terms, but it's hard to assign a probability, and the true probability will never be known, since we live in a deterministic rather than probabilistic world (the cat is either dead or alive, and the deal will either closes or it won't).
So if it does close, as I think is likely, I'll grant another well-deserved victory lap, but that doesn't mean it was a sure thing, nor does convey any informational content about the actual probability.
BCE LBO solvency out?
https://www.reuters.com/article/us-dealtalk-solvency-bce-idINTRE4BA7IU20081211
Great writeup. in regards to Section 5, financing and insolvency out, why is the provision below not all that needs to be said?
“Notwithstanding anything contained in this Agreement to the contrary, the Equity Investor, Parent and Acquisition Sub each acknowledge and affirm that it is not a condition to the Closing or to any of its obligations under this Agreement that the Equity Investor, Parent, Acquisition Sub and/or any of their respective Affiliates obtain any financing (including the Debt Financing) for any of the transactions contemplated by this Agreement.”
It says in no uncertain terms imo, whatever the rest of the agreement says, financing is not a condition to closing. So, what am I missing that all of these attorneys and legal experts are digging deep into the language on a $1 billion breakup free or an insolvency certificate when the agreement seems crystal clear on the subject? I feel like I must be missing something.
Fantastic work as always, sir.
Thanks
Great recap. I had the same thoughts re the risks of taking an premature victory lap.
I agree that the deal will likely close on the agreed terms, but it's hard to assign a probability, and the true probability will never be known, since we live in a deterministic rather than probabilistic world (the cat is either dead or alive, and the deal will either closes or it won't).
So if it does close, as I think is likely, I'll grant another well-deserved victory lap, but that doesn't mean it was a sure thing, nor does convey any informational content about the actual probability.