Answer any TWO questions Word limit: 900 words per question

16.

a) Compare the key drivers, innovations, and deal structure of the typical M&A deals of the Deal Decade (1980s) with those of the most recent wave that started in 2014 (80 marks)

b) Describe three typical common factors that typically put an end to a merger wave (i.e. turning points) (20 marks)

17.

a) Describe the Modigliani and Miller irrelevance theorem on corporate restructuring, and mention what this theorem implies for the shareholder wealth effects of corporate restructuring (50 marks)

b) Existing empirical studies tend to find that spin-offs create positive shareholder value for companies. Provide and discuss two theories that are consistent with this finding (50 marks)

18.

a) Provide and discuss three characteristics of a firm or a deal that might affect merger arbitrageurs interest in the deal. Assume that the deal is stockfinanced (60 marks)

b) As discussed in class, many announced mergers are currently being contested by antitrust governmental organisations. What is the expected impact of heightened antitrust scrutiny for a particular deal on merger arbitrage spreads for that deal? Justify your answer (40 marks)