Staple Financing
The term staple financing (also: stapled finance , staple financing package ) is called a financing package or a financing commitment in investment banking , which is arranged in the context of company sales by banks on behalf of the seller and made available to possible buyers.
Origin of the term
The term “staple financing”, roughly translatable in German as “attached financing”, is derived from the process of creating the documentation that an investment bank makes available to potential buyers when advising the seller on an M&A transaction. A written financing commitment is attached to the sales prospectus (also called information or offering memorandum ) with details of the company being offered.
definition
The financing commitment for the takeover of a company or parts of a company with Staple Finance is generally available to every successful bidder after a bidding process. However, the successful bidder has no obligation to accept this financing. The financing commitment is usually made very early in an M&A transaction so that the acquiring company can check early enough how high the leverage , i.e. the ratio of new debt taken on to the assets of the company to be bought, or the market value of the company to be bought, is. In the financial commitment the terms of the loan as accordingly repayment term , interest rate , covenants etc. recorded.
literature
- Paul Povel, Singh Rajdeep: Using bidder asymmetry to increase seller revenue. In: Economics Letters. 84, 2004, ISSN 0165-1765 , pp. 17-20, online (PDF; 84.90 kB) .
- Holger M. Müller, Panunzi Fausto: Tender offers and leverage. In: Quarterly Journal of Economics. 119, 4, 2004, ISSN 0033-5533 , pp. 1217-1248, online .
Individual evidence
- ↑ http://www.investopedia.com/terms/s/staplefinancing.asp
- ↑ Kevin Miller: "In Defense of Stapled Finance" Boardroom Briefing, Vol. 3 (3), Fall 2006, p. 44 ff.