| H |
| M&A Term | Definition | Note |
| H | Hijri Calendar | N1 |
| haircut | Difference between the quoted market value of an asset and the value attributed to the asset for the purpose of holding it as collateral. | N6 |
| Handbook | the handbook of all of the FSA’s rules, including (but not limited to) the Listing Rules, the Disclosure and Transparency Rules and Code of market conduct | N1 |
| Handover | passing control or responsibility for something to someone else. A common negotiating point for business sales | N5 |
| Hang Seng Index | Principal Hong Kong share price index. | N6 |
| hard currency | Generally refers to currencies of developed economies but is often restricted to refer to the major global currencies, that is, the US dollar, the euro and the yen. (See also soft currency.) | N6 |
| Hard Undertaking | an undertaking with no “out,” i.e., binding in all circumstances, as compared to a soft undertaking which ceases to be binding if a higher Offer emerges or a semi-hard undertaking which ceases to be binding if a higher Offer emerges which exceeds the existing Offer by an agreed amount | N1 |
| Hard Underwriting | When a bank or consortium of banks undertakes to make every effort to sell the securities being issued (e.g. in an IPO), and explicitly commits itself to place the securities (unlike Best Efforts Underwriting). | N2 |
| Hart-Scott-Rodino Act | the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR); in general, requires that both the Bidder (the Acquiring Person) and the Target Company (the Acquired Person) make certain filings with the Department of Justice and the Federal Trade Commission at least 30 days (15 days in the case of a Tender Offer or Exchange Offer) prior to consummation of an Acquisition. The two federal antitrust agencies determine among themselves which will take precedence in reviewing the HSR filing. The reviewing agency can, in effect, stay consummation of the Acquisition by making a Second Request for additional information, which has the effect of extending the waiting period until the request has been fulfilled to the satisfaction of the agency. A Second Request ordinarily will be very detailed and compliance with it can take months. Notably HSR is strictly informational and does not change the antitrust principles otherwise applicable to the Acquisition. However, the delay inherent in a Second Request, coupled with its signaling effect in terms of potential agency concern about substantive violations of the antitrust laws, particularly if not expected, can be a concrete setback to deal timing and deal certainty. See Competition Commission. | N1 |
| Has-Gets | a common type of analysis of the financial aspects of a proposed Stock-For-Stock Acquisition, in which each party’s contribution to the financial metrics of the Pro Forma combined entity (usually measured in percentages of the whole) is compared to the percentage of the same financial metrics of the Pro Forma combined entity which will be represented by each entity’s shareholders ownership of the combined entity. For example, one entity may be responsible for 50 percent of the Pro Forma combined earnings, but its shareholders may own only 45 percent to the combined entity following the deal. See also Give-Get. | N1 |
| Headhunter | Recruitment agent who finds suitable candidates for vacant positions (often executive roles) in return for commission. | N2 |
| Headroom | this term is sometimes used to refer to the difference between the current performance of the company and the covenants | N4 |
| Heads of agreement | an agreement in principle ( see also «LOI» and «MOU»). In practice, these terms are often used interchangeably. This term also refers to a binding list of basic elements that will be covered in more detail in a Share Purchase Agreement («SPA»). | N4 |
| Heads of Agreement / Heads of Terms | see Term Sheet. | N2 |
| Heads of Agreement/Heads of Terms | an agreement in principle (also called a Letter of Intent (LOI) or Memorandum of Understanding (MOU)). This document can also refer to a binding list of basic elements that will be covered in more detail in a Share Purchase Agreement (SPA). This document is typically, but not always, prepared by an adviser (lawyer/accountant/corporate-financier or broker). | N5 |
| Health and safety | the investigation into working conditions with a focus on health and safety. Usually undertaken by the purchaser’s solicitors or specialist advisers. | N5 |
| Health and safety | the investigation into working conditions with a focus on health and safety | N4 |
| Hedge | an investment or strategy which attempts to reduce the impact of adverse fluctuations in the price of one asset by taking an offsetting position in another asset. For instance, many companies Hedge their foreign exchange exposure by entering into a Currency Swap and their interest rate exposure by entering into an Interest Swap. | N1 |
| Hedge Agreement | Hedge contract with the Hedge Counterparty, who assumes the risk to be hedged. | N2 |
| Hedge Counterparty | Party to a Hedge Agreement who assumes the risk to be hedged. | N2 |
| hedge fund | Fund that seeks to generate investment returns by using non-traditional investment strategies, utilising mechanisms such as short selling, leverage, program trading, arbitrage, and tools such options, futures, swaps and forwards (derivatives in general). | N6 |
| Hedge Fund | Investment fund that makes highly speculative investments, often involving heavy use of borrowed capital (Leverage Effect); the connection with the term “hedging” is merely historical and does not refer to the actual nature of the investments. | N2 |
| Hedge Fund | a fund that invests essentially at the derivatives market in derivative instruments such as Options and futures or that exploits price differences of financial instruments through other innovative portfolio strategies | N1 |
| Hedge funds | funds that, unlike Private Equity funds, also invest in assets other than shares. | N5 |
| Hedge funds | funds that, unlike PE funds, also invest in assets other than shares. | N4 |
| Hedge Funds Standards Board (HFSB) | Industry body responsible for creating and monitoring best practice standards for hedge fund managers. It is an independent body, and compliance with the standards by hedge funds is voluntary. | N6 |
| hedging | Action taken to protect the value of a portfolio against a change in market prices, often by offsetting the exposure to a specific risk by entering a position in an investment with the exact opposite pay-off pattern. It is usually used to reduce or eliminate risk, although similar techniques can also be used to speculate in a market. | N6 |
| Hedging | Transaction designed to limit specific risks, e.g. currency fluctuation or price volatility in commodities. | N2 |
| Hedging of interest risk | derivative financial instruments, such as interest rate swaps, are used to convert a variable interest rate into a fixed interest rate | N4 |
| Helen of Troy | tax regulations which impose additional requirements for an Acquisition to be tax-free to shareholders of a US Target corporation where the Target is acquired by a non-US Acquirer corporation | N1 |
| Hell and High Water Clause | In a clause of this type, the buyer agrees to pay the purchase price irrespective of whether certain risks defined in the contract occur or whether the contract can be completed (e.g. lack of merger control approval, completion is legally or physically impossible). Accordingly, the buyer bears the full economic consequences of these risks. | N2 |
| Hell or High Water | contract terminology used in a variety of circumstances. The term is most frequently used to describe a Covenant by the Buyer that it will take all actions within its power to resolve any antitrust issues which may arise, including the disposition of any of its, or the Target Company’s, businesses. | N1 |
| High Vote/Low Vote | a structure in which different Classes of Common Stock have different voting rights (a Class A Share may provide a holder with one vote per Share, while a Class B Share may provide its holder with ten votes per Share). The High Vote/Low Vote structure permits Insiders, family members or early Investors to continue to control a company after its IPO (see the New York Times, Google and Facebook for some examples). 1. (FRA) the same goal may be achieved under French Law when choosing a certain corporate form which enables the separation of capital and control |
N1 |
| high yield bond | See junk bond. | N6 |
| High yield bonds | bonds issued by companies with a relatively low credit rating or a high degree of risk. As the name indicates, these bonds have a relatively high yield (return) because of the high risk. Also known as junk bonds. | N4 |
| High Yield Bonds | Bonds rated below Investment Grade by the ratings agencies, but note that in emerging markets where Issuers may be rated below Investment Grade, their Bonds are often not strictly speaking High Yield Bonds in that the Covenant package and the structuring will be simpler | N1 |
| high yield stocks | Shares which have a higher than average dividend yield or those where a relatively high proportion of the total return is derived from dividend income. Typical examples of high yield stocks are utilities. | N6 |
| Highly Conditional | a high degree of Conditionality | N1 |
| Highly Confident | a non-commitment Commitment Letter. A Highly Confident letter makes no binding promises or commitments, but indicates that the issuing institution is confident that the described financing can be obtained. Often delivered in initial rounds of an Auction for a Target Company to demonstrate that a Bidder has Financing Sources lined up (even if not locked down). | N1 |
| Hindsight Bias | Tendency to assume with hindsight (possibly incorrectly) that the occurrence of an event could have been predicted. | N2 |
| historic volatility | Volatility as mathematically determined from price fluctuations of the underlying asset over a past specified period of time. (See also implied volatility.) | N6 |
| Hive-down | Restructuring method in which a new company is established to acquire specific shares or assets (by means of transfer or spin-off) of the company to be restructured. The latter can use the proceeds to (partially) pay down its debt. The investor then acquires the new company without the existing group structures, risks and financing of the original company. | N2 |
| Hive-Down | a form of Reorganization of a company or group of companies whereby a company transfers a part of the business to a subsidiary | N1 |
| HK Takeovers Code | the set of general principles and rules which establish the framework for public company takeover, merger and Share repurchase transactions in Hong Kong. The Codes on Takeovers and Mergers and Share Repurchases do not have the force of law and represent “a consensus of opinion of those who participate in Hong Kong’s financial markets and the SFC regarding standards of commercial conduct and behavior considered acceptable for takeovers, mergers and share repurchases….” | N1 |
| HK Takeovers Panel | the Takeovers and Mergers Panel, the body that hears disciplinary matters in the first instance and reviews rulings by the Executive at the request of any party dissatisfied with such a ruling; the panel also reviews, from time to time upon request by the SFC, the HK Takeovers Code and recommends appropriate amendments | N1 |
| HKEx | the Holding Company of the Hong Kong Stock Exchange, Hong Kong Futures Exchange Limited and Hong Kong Securities Clearing Company Limited which was established in 2000. Formally referred to as Hong Kong Exchanges and Clearing Limited. | N1 |
| HKFRS | acronym for Hong Kong Financial Reporting Standards, which is the set of financial reporting standards issued by the Hong Kong Institute of Certified Public Accountants | N1 |
| HMRC | shorthand for Her Majesty’s Revenue and Customers, a department of the UK Government responsible for the collection of taxes | N1 |
| Hockey Stick Projections | a descriptive term, with a pejorative connotation, for a Target Company’s projections which show a sharp upward trajectory | N1 |
| Hold Harmless | where one party agrees (often by letter agreement) not to hold another contracting party responsible for claims and/or liabilities which it may incur | N1 |
| Hold Harmless Clause | Contractual provision requiring one of the parties to indemnify the other party in respect of specific risks, e.g. claims for compensation (see Indemnification). | N2 |
| Hold harmless letter / approved reader letter | letter of indemnity. A letter in which an adviser provides a party with access to a report or a file, in which the party agrees to indemnify the advisor from any liability that could arise from the access provided to files or reports. | N5 |
| Hold harmless letter / approved reader letter | This is in the case where an advisor provides someone with access to sensitive information. The access to this information could potentially result in a claim against the advisor. to hold the advisor ‘harmless’ to the liability of such a claim, the party given access to the information signs a letter agreeing to indemnify the advisor in the event of such a claim | N3 |
| Hold harmless letter/approved reader letter | letter of indemnity. A letter in which an adviser provides a party with access to a report or a file, in which this party agrees to indemnify the advisor from any liability that could arise from the access provided to files or reports | N4 |
| Holdback | another term for an Escrow | N1 |
| HoldCo | Holding Company. | N2 |
| Holdco | shorthand for Holding Company | N1 |
| Holdco Debt | debt at the Holdco level. Particularly where the Holdco has no operations or assets other than its Stock in the operating company, Holdco Debt is an interesting creature, generally not guaranteed by the operating company below it. So from the Holdco debtholders’ perspective, Holdco Debt is debt. But from the lower operating company perspective, the Holdco Debt is essentially equity because payments on the Holdco Debt can only be paid with dividends up from the operating company. The ability to incur new debt at a Holdco level depends on whether the operating company Indentures and Credit Agreements restrict Holdco Debt. | N1 |
| Holding Announcement | an announcement made by a Listed Company in the event of a leak of a potential material corporate event and generally advising shareholders to exercise caution when dealing in the Shares of the company | N1 |
| Holding company | The holding company would have more than 50% of the total voting power and has the control on the other company | N3 |
| Holding Company | Parent company of one or more companies. Its object is to hold and manage the stakes in the investee companies; in some cases, holding companies are also operationally active. The abbreviation HoldCo is used in draft contracts. | N2 |
| Holding Company | a company which sits on top of (or “holds” the Stock of) one or more operating subsidiaries. This concept sometimes connotes a company that does nothing else (i.e., has no operations). See Parent, Holdco Debt and Double Dummy Merger. 1. (UK) defined in the UK context by section 1159 of the UK Companies Act | N1 |
| Hold-Separate Agreement | agreement entered into in connection with a Cross-Border Merger according to which specific companies in certain countries of a Target group are to be treated separately until obtaining the respective Merger Clearances in order to enable the parties to consummate a substantial part of the transaction independent therefrom beforehand | N1 |
| Hong Kong Stock Exchange | the only recognized stock exchange or stock market in Hong Kong. Formally referred to as The Stock Exchange of Hong Kong Limited, commonly abbreviated to “SEHK” or “HKSE,” is a subsidiary of Hong Kong Exchanges and Clearing Limited or HKEx. | N1 |
| Horizontal integration | where companies acquire a similar company in the same sector or industry. (see also Vertical integration) | N5 |
| Horizontal merger | It is a merger of two competing firms, which are at same stage of industrial process | N3 |
| Hostile | see Hostile Bidder | N1 |
| Hostile Bidder | a Bidder proposing a Business Combination which, at least initially, is opposed by the Target Company | N1 |
| Hostile takeover | a hostile takeover can be made more difficult by granting additional rights to certain existing shareholders. These rights can mean that a capital increase is reserved for friendly parties by certain existing shareholders. | N4 |
| Hostile Takeover | A takeover that is not welcomed by the Target, which often rejects the takeover (see also Unfriendly Takeover). | N2 |
| Hostile Takeover | frequently used to describe a Business Combination or a proposed Business Combination that, at least initially, is opposed by the Target Company or proposed by a Hostile Bidder. There are many degrees of hostility, ranging from an initial Unsolicited Acquisition Proposal which is withdrawn if the Target Company turns it down, to a Tender Offer or Exchange Offer which is made in the face of a Target Company’s fierce opposition. Note that once a Target Company agrees on the terms of a Hostile Bid, the deal becomes negotiated and is no longer a Hostile Bid. Hostile, as a description of an Acquisition Proposal or an Acquirer, usually is intended as a pejorative connotation, although the connotation is usually mostly in the eyes of the Target Company’s Board of Directors, Management and employees, not the market. | N1 |
| Hostile take-over | “A “”hostile takeover”” allows a bidder to take over a target company whose management is unwilling to agree to a merger or takeover. A takeover is considered “”hostile”” if the target company’s board rejects the offer, and if the bidder continues to pursue it, or the bidder makes the offer directly after having announced its firm intention to make an offer. A hostile takeover can be conducted in several ways. A tender offer can be made where the acquiring company makes a public offer at a fixed price above the current market price. An acquiring company can also engage in a proxy fight, whereby it tries to persuade enough shareholders, usually a simple majority, to replace the management with a new one which will approve the takeover. Another method involves quietly purchasing enough stock on the open market, known as a “”creeping tender offer””, to effect a change in management. In all of these ways, management resists the acquisition, but it is carried out anyway. The main consequence of a bid being considered hostile is practical rather than legal. If the board of the target cooperates, the bidder can conduct extensive due diligence into the affairs of the target company, providing the bidder with a comprehensive analysis of the target company’s finances. In contrast, a hostile bidder will only have more limited, publicly available information about the target company available, rendering the bidder vulnerable to hidden risks regarding the target company’s finances. An additional problem is that takeovers often require loans provided by banks in order to service the offer, but banks are often less willing to back a hostile bidder because of the relative lack of target information which is available to them.” | N3 |
| house view | Formal opinion formed on an issue by an organisation as a whole | N6 |
| HR | Human Resources. | N2 |
| HSR | acronym for the Hart-Scott-Rodino Act | N1 |
| Human Resources (HR) | Generic name for department dealing with employee and personnel matters. | N2 |
| Hurdle | the return that a fund must realize for its investors before the management of the investment fund can share in the added value of the fund | N4 |
| Hurdle | the term typically used to describe the level after which certain commercially agreed terms will apply. For example, a director may receive additional equity in the event that the Hurdle percentage Return on Investment in a transaction is reached. | N1 |
| hurdle rate | Minimum rate of return required before a prerequisite profit is made or a performance fee is paid. | N6 |
| Hurdle Rate | a defined break-even point in a Private Equity or Venture Capital Fund which has to be reached so that a fund manager receives a remuneration in the form of Carried Interest | N1 |
| Hybrid Securities | a component of a company’s Capital Structure that cannot be classified purely as debt or equity, as it may have characteristics of both (e.g., convertible debt, convertible preferred stock, employee stock options) | N7 |
| hyperinflation | Describes extremely high rates of inflation. Usually coincides with general economic collapse. | N6 |
Reference
N1: referring to The Book of Jargon – Global Mergers & Acquisitions, first edition, the Latham & Watkins, available at https://www.lw.com/admin/Upload/Documents/BoJ_Global_MandA-locked-March-2015.pdf.
N2: referring to Glossary of Key M&A and Corporate Terms, 4th edition, Dr Anne Meckbach and Dr Tobias Grau, available at https://cms.law/en/deu/publication/glossary-of-key-m-a-and-corporate-terms-2020.
N3：referring to M&A Dictionary, Global PMI Partners, available at https://gpmip.com/dictionary/.
N4：referring to M&A jargon demystified, KPMG, available at https://issuu.com/kpmg_be/docs/kpmg_m_a_vakjargon_en_digital.
N5: referring to Simple Guide to M&A Terminology and Jargon, Lucas & Weston Ltd., available at https://uploads-ssl.webflow.com/5708da760dd2dc033a78bd13/5b7ea45f3dbc72645fbee4b2_L%26W%20-%20M%26A%20Glossary.pdf.
N6：referring to INVESTMENT DICTIONARY, MARSH & McLENNAN COMPANIES, available at https://www.mercer.com/content/dam/mercer/attachments/europe/Netherlands/ic-dictionary-mercer.pdf.
N7: referring to International Valuation Glossary—Business Valuation, November 2021, jointly published by ASA, CBV Institute, RICS and TAQEEM, available at https://www.appraisers.org/docs/default-source/default-document-library/international-business-valuation-glossary_en_final.pdf?sfvrsn=e37c69d4_2.
The above information is collected from the Internet and reorganized for the purposes of learning and sharing only and not for any other purposes. It can not be guaranteed to be error-free.