I understand they were only supposed to have three extensions to the merger, and this is the third one. My question is, what's to stop two parties that want to merge, to extend the deadline?
I mean, if both sides want the deal to happen, they can BOTH agree to amend the document and add another extension. Or two or three. If both parties agree, why can't they?
Does it really matter at this point?
I don't see anything about the merger agreement terminating on it's own on Nov. 26, but perhaps I missed something. I see no reason the merger cannot happen after Nov. 26.
Based on the existing terms it would need to be scrapped and redone…..but if chin won’t approve it’s futile
At some point in time some shareholder is going to get annoyed that their shares are being locked up and probably make a claim that VMware has a fiduciary duty to terminate the deal, especially if it becomes clear the Broadcom is unlikely to get the required approvals.
Also keep in mind, the termination fee goes both ways, which will likely explain VMware's behavior to you, since they most definitely do not want to pay Broadcom $1.5B either.
Blah blah blah, they do what they want. This is boiler plate M&A shït
Looking for a “gotya” moment?
Move on.
The big boys are at work, here. Sit down and get back to work little bïtch.
Yes, but I don't think that means that not getting required regulatory clearances by the outside date automatically causes termination of the merger agreement. I think it means that if either party terminates the merger agreement after the outside date, BC must pay $1.5B.
The agreement states:
The merger agreement may be terminated at any time before the effective time of the second merger:
• by mutual written consent of Broadcom and VMware; or
• by either Broadcom or VMware, if: . . .
After Nov. 26, we still need VMW or BC to terminate to trigger BC paying $1.5B for failing to get China to approve.
You are indeed missing something. If you look at the SEC filing you linked, there's an excerpt that states that Broadcom must pay VMware $1.5B if they can't get regulatory clearance from the outside date:
Termination Fee and Expenses (see page 122)
....
Broadcom must pay VMware a termination fee of $1.5 billion if the merger agreement is terminated in certain circumstances including as a result of certain required regulatory clearances not being obtained by the outside date.
All other expenses relating to the transactions will generally be paid by the party incurring the expense.
Go to the VMware shareholder voting materials and go to page 120 and the "Termination of the Merger Agreement" section.
https://www.sec.gov/Archives/edgar/data/1124610/000114036122035833/ny20005454x1_defm14a.htm#tQA
As I read it:
I don't see anything about the merger agreement terminating on it's own on Nov. 26, but perhaps I missed something. I see no reason the merger cannot happen after Nov. 26.
They can. Not sure if the interest rates would still be favorable though. It might make financing almost unpalatable.
They already figured out a way to take less debt than they originally soughing, if they get more creative in issuing some sort of bonds, they may even eliminate the upfront debt.
Technically, They could go for another few extensions and still continue to pursue China, not saying they will succeed, that's for China to let them or not.
PS. Not a fan, I know probably will not be a popular opinion, but it is possible.
Now, if Broadcom board will advise it or not, that is a different story, MD will be happy to extend the contract and more outside date(s).
They can't get China approval after 1.5 years, what's going to change if they extend another month or 2? Not going to happen
They can do whatever they want, these are the masters of the universe (in their heads…)
Call it like it is. AN ACQUISITION and not a merger. They can do whatever they want and/or pay fines.
Unlikely they extend. China can delay the deal for however long it wants. Of course both companies seem interested to extend but financing looks a lot different than 1.5 years ago.
Back to Q4 targets because VMware will remain an independent company.
Contract law.
The contract has specific performance requirements.
Execute your contract.
The merger agreement is specific. Remember, it's not just the two parties, but all shareholders would have to approve any changes to the agreement as well.on both sides.
They would have to do it all again
They can. Not sure if the interest rates would still be favorable though. It might make financing almost unpalatable.