|P|
| M&A Term | Definition | Note |
| P&L | See profit and loss statement. | N6 |
| P&L Statement | shorthand for Profit and Loss Statement | N1 |
| P/E | acronym for price to earnings, as in Price/Earnings Ratio | N1 |
| P/E ratio (price earnings ratio) | Commonly used indicator of the value of a stock, calculated as a company’s current share price divided by its earnings per share. A high P/E ratio may be justified because a company is expected to increase its earnings per share or it may indicate simply that the company is expensive. | N6 |
| P2P | shorthand for Public to Private, i.e., a transaction whereby a Public Company is taken private. See also Public to Private, Going Private and Privatisation | N1 |
| Pac Man Strategy | in a Hostile Takeover situation, when a Target Company of a hostile Tender Offer or Exchange Offer launches a Tender Offer or Exchange Offer for the Hostile Bidder | N1 |
| Pacific Rim | Far Eastern countries and markets bordering the Pacific area. | N6 |
| Pac-man strategy | The target company attempts to take over the hostile raider. | N3 |
| PADA | See Personal Accounts Delivery Authority. | N6 |
| Panel | 1. (UK) shorthand for the UK Takeover Panel 2. (HKG) shorthand for the HK Takeovers Panel. Also commonly known as the “Takeovers Panel.” |
N1 |
| Pan-European fund | Vehicle that invests across all European countries including the UK. | N6 |
| par value | See nominal value. | N6 |
| Par value | The face value of a bond. Also, the arbitrary value given to the stock by the issuing company. This figure is relatively meaningless since the current value of a stock is its price established in the market, regardless of its stated par value. | N3 |
| Par Value | means the face value of Shares or loan notes (as applicable) | N1 |
| Parachute | short hand for Parachute Payment | N1 |
| Parachute Payment | payments made to executives in connection with a Change of Control. Parachute Payments may be Double Trigger or Single Trigger. See also Golden Parachute. | N1 |
| Parent | another name for Holding Company | N1 |
| Parent Company Merger | a Merger of an Acquirer Parent and Target Parent entities. The Surviving Entity can be either Parent entity, although it is most common for the Acquirer Parent to be the Surviving Entity. A Parent Company Merger is distinguished from a Triangular Merger which uses a wholly-owned subsidiary of the Acquirer Parent as the entity to be merged with the Target Parent and results in the Acquirer Parent becoming the Parent of the Target Company. See also Direct Merger. | N1 |
| Parent-Parent Merger | another name for a Parent Company Merger | N1 |
| Pari Passu | equality of treatment, e.g., in a right of payment | N1 |
| parity (convertible bonds) | State in which the value of the equity (or other underlying security) is equivalent to the value of the bond on conversion. | N6 |
| Part Cash/Part Share | see Part Cash/Part Stock | N1 |
| Part Cash/Part Stock | a Combination transaction in which the consideration consists of both Stock and cash. Outside of the US, this is more commonly called Part Cash/Part Share. | N1 |
| Partial bid | When a bid is made for acquiring part of the shares of a class of capital where the offeror intends to obtain effective control. This is made for the equity shares. | N3 |
| Partial Bid | another name for a Partial Offer | N1 |
| Partial Offer | a Tender Offer or Exchange Offer for less than all of a Target Company’s outstanding Common Stock. See also Partial Bid. 1. (UK) Partial Offers for less than 100 percent of the Issued Share Capital of UK Listed Companies are governed by Rule 36 of the UK Takeover Code and require the consent of the Panel 2. (FRA) the principle under French law requires the Offer be made for all the Share Capital. However, the AMF’s General Regulation provides for very limited exceptions under which a Partial Offer may be authorized. 3. (HKG) Partial Offers are governed by Rule 28 of the HK Takeovers Code and require the Executive’s consent. 4. (SGP) a Voluntary Offer made by the Offeror for less than 100 percent of a Target Company’s Shares not already owned by the Offeror and its concert parties. Partial Offers are governed by Rule 16 of the Singapore Takeover Code. The SIC’s consent is required for any Partial Offer. |
N1 |
| Participating Member State | the EU member countries which have adopted the Euro (€) as their sole legal tender. There are currently 17 Participating Member States. | N1 |
| Participation-Exemption | a favorable tax regime providing for a full or partial corporate income tax exemption on a company’s dividend incomes and/or in connection with a participation held in another company. This regime is generally available only for participations that represent a material value or stake in the Affiliate’s equity and which are held over a minimum period of time. Such conditions vary from one jurisdiction to another. | N1 |
| Partnership | meaning depends in part on the context, but when referring to a legal entity, a Partnership is an association of two or more individuals or entities to carry on a business created under state or national law, as applicable. A Partnership is usually governed by a Partnership Agreement, the mandatory contents of which are specified by the relevant law. Like a corporate Charter, laws governing Partnership Agreements are enabling, permitting great scope for private ordering in the Partnership Agreement. 1. (US) Partnerships are subject to a special tax regime — both technical and complicated — spelled out in detail in the US Internal Revenue Code and IRS regulations. It is best to have an experienced Partnership tax lawyer at your side in designing Partnership structures and drafting Partnership Agreements because small slips can have large negative tax consequences. |
N1 |
| Partnership Agreement | the agreement among Partners of a Partnership governing their relative rights and obligations among one another with respect to the Partnership. See also Partnership. | N1 |
| passive investor | Investor who does not get closely involved with investee companies. Normally invests as a member of a syndicated deal or via a pooled fund. | N6 |
| passive management | Portfolio which aims to replicate a particular market index or benchmark fund and does not attempt to actively manage the portfolio. (See also active management, indexation.) | N6 |
| Pass-Through | a business entity which, for income tax purposes, is not subject to taxation at the entity level and the tax attributes of which are passed through the entity to its equity owners. The most common forms of Pass-Through business entities are Partnerships and Limited Liability Companies. | N1 |
| PAT / Profit After Tax | the profit after taxes. | N5 |
| PAT/Profit After Tax | the profit after taxes | N4 |
| Paying Agent | a name for an agent, usually a bank or trust company selected by the Buyer, that manages the process of exchanging the Target Company’s Equity Interests for cash in a Cash Merger. The party performing this function is sometimes called an Exchange Agent; however that term is better used in a non-Cash Merger where the Buyer’s Stock is exchanged for Shares of the Target Company. | N1 |
| Pay-in-Kind | a feature of a Note or Bond (or a Preferred Stock) which allows the Issuer to pay Interest (or dividends) in the form of additional Notes or Bonds (or Shares of Preferred Stock) in lieu of paying in cash. See PIK. | N1 |
| Payment in kind | from borrower to lender between the drawdown date and the maturity or refinancing date, not even interest or parts thereof, thus making it an expensive, high-risk financing instrument. PIK is to be interpreted as interest accruing until maturity or refinancing. PIK loans are typically unsecured (i.e., not backed by a pledge of assets as collateral) and/or with a deeply subordinated security structure (e.g., third lien). Maturities usually exceed five years and in a standard offer, the loan carries a detachable warrant (the right to purchase a certain number of shares of stock or bonds at a given price for a certain period of time) or a similar mechanism to allow the lender to share in the future success of the business, making it a hybrid security.” | N3 |
| Payment in Kind (PIK) | 1. With this type of clause in a loan agreement, interest is not paid on an ongoing basis but added instead to the principal as compound interest and paid at the end of the term. Substantially higher interest is usually payable on PIK loans due to the greater risk. 2. In a more general sense, “payment in kind” means that provision is made for non-monetary consideration. | N2 |
| PBGC | acronym for the Pension Benefit Guaranty Corporation | N1 |
| PBT / Profit Before Tax | the profit before taxes, sometimes also described as EBT/earnings before tax. | N5 |
| PBT/Profit Before Tax | the profit before taxes, sometimes also described as EBT/earnings before tax. | N4 |
| PD | acronym for Prospectus Directive | N1 |
| PE | Private Equity. | N2 |
| PE | acronym for Private Equity | N1 |
| PE Ratio | A price-earnings ratio (P/E Ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings. Used mainly for listed company shares for price comparison. | N5 |
| PEC | acronym for Preferred Equity Certificate | N1 |
| Peer Group | A group that is similar or comparable, allowing it to serve as a reference point. A peer group comparison is sometimes used when valuing a company. Looking at competitors in the same market or the same industry enables conclusions to be drawn about the company’s current value and future prospects. | N2 |
| peer group analysis | See league table. | N6 |
| Penalty Clause | Provision for imposing contractual penalties; when agreeing penalties of this nature, particular attention must be paid to the law governing the contract – depending on the jurisdiction, contractual penalties must meet special requirements in order to be effective, or are wholly ineffective. | N2 |
| Penny Stocks | a name for shares with a very low absolute price on the stock exchange | N4 |
| pension | Regular, periodic payment to an individual, usually following cessation of employment. This benefit will often be defined benefit or defined contribution in nature. (See also defined benefit, defined contribution.) | N6 |
| Pension Benefit Guaranty Corporation | a US quasi-governmental entity that insures (up to a certain extent) and administers Defined Benefit (Pension) Plans which have become insolvent. See PBGC. | N1 |
| Pension Protection Fund (PPF) | Independent body set up by the UK government in 2005 with the aim of providing financial assistance to the members of defined benefit pension schemes whose scheme sponsor becomes insolvent. The PPF is funded by a levy imposed on all defined benefit pension schemes. (See also defined benefit, scheme sponsor.) | N6 |
| Pensions Act 1995 | Major piece of legislation that was introduced with effect from April 1997. The Act required trustees for the first time to produce and maintain a statement of investment principles (SIP) and introduced the minimum funding requirement (MFR) | N6 |
| Pensions Act 2004 | Major piece of legislation following the Pensions Act 1995. Introduced a new statutory funding regime to replace the minimum funding requirement. Under this, pension funds are required to produce a statement of funding principles setting out how they intend to achieve/ maintain full funding. Also formally established the Pension Protection Fund (PPF). (See also Pension Protection Fund.) | N6 |
| Pensions due diligence | the review of the existing and future obligations related to pensions. The future commitments can vary based on the type of pension plan set up by the company. Usually undertaken by the purchaser’s accountants or specialist advisers. | N5 |
| Pensions due diligence | the review of the existing and future obligations related to pensions. The future commitments can vary based on the type of pension plan set up by the company | N4 |
| Pensions Regulator | the UK regulator which, pursuant to the Pensions Act 2004, has responsibility for all employment-based pension schemes in the UK and may investigate and issue contribution notices to better protect pensioners | N1 |
| Per Capita Acceptance | an alternative to Pro Rata Acceptance used in Cash Election and Stock Election Acquisitions to determine which electing shareholders will receive an Oversubscribed type of Capped consideration 1. (US) the Williams Act prohibits Per Capita Acceptance from being used in Partial Offers to determine which tendering shareholders will receive the promised consideration when the Offer is Oversubscribed |
N1 |
| percentile | Relative ranking (in hundredths) of a particular portfolio (or manager) in a league table of returns. For example, a percentile ranking of 15 indicates that 14% of portfolios performed better and 85% produced a lower return. | N6 |
| performance attribution | Process which assigns over- or underperformance to the different steps taken in the investment management process, such as asset allocation, stock selection, currency management, etc. Used as a means to show where value has been added/lost. | N6 |
| performance measurement | Calculation of a fund’s historic return on its investments. This can be performed on total assets or on individual asset classes. For the purposes of analysing a manager’s performance relative to a benchmark, performance is calculated on a timeweighted rate of return basis which is unaffected by the size and incidence of external cash flows (which are outside the manager’s control). | N6 |
| Performance related payment | similar to an earn-out. This is where a proportion of the sale consideration is deferred and linked to the future performance of the business or other clearly defined performance metric | N5 |
| performance-related fee | Investment management fee determined by the degree of overperformance relative to an agreed benchmark. | N6 |
| Perimeter | Refers to the subject of a transaction or other activity, e.g. a group of companies involved in restructuring or an IPO. | N2 |
| Periodic Reports | 1. (US) the annual report on Form 10-K and the quarterly reports on Form 10-Q required by the Exchange Act to be filed with the SEC by all Public Companies with Securities registered with the SEC. The Securities laws specify precisely who is required to file these reports, but as a general matter Periodic Reports are filed by companies that have completed an IPO, have Securities listed on an exchange, or have a Class of Securities registered under the Exchange Act. 2. (FRA) the EU transparency directive requires Participating Member States to establish rules for the disclosure of periodic and ongoing financial and informational reports for companies whose Shares are admitted to trading on a Regulated Market. In France, the AMF’s General Regulation govern the publication of an annual report as well as quarterly reports for Listed Companies. |
N1 |
| Permanent Securities | the Securities (usually High Yield Bonds) intended to be issued to finance an LBO. These are the Securities that the Bridge Loans backstop in case the offering of Permanent Securities is unsuccessful. | N1 |
| permitted investments | Investments detailed in an investment management agreement in which a manager may invest. | N6 |
| Permitted Leakage | Provision in the context of a Locked Box mechanism whereby an outflow of cash is permitted in relation to certain items and events between the effective date for establishing the purchase price and Closing (see also Leakage). | N2 |
| perpetual bond | Bond that is issued with no redemption or maturity date. The coupons on a perpetual bond are paid indefinitely. | N6 |
| perpetuity | Stream of cash flows that theoretically will last forever. | N6 |
| Perpetuity Growth Rate | a financial concept utilized in DCF methodologies. Perpetuity Growth Rate basically means an assumed (and usually static) never ending growth rate. | N1 |
| Personal Accounts Delivery Authority (PADA) | Public organisation responsible for setting up and managing a national trust-based pension scheme for low to moderate income earners. (See also National Employment Savings Trust.) | N6 |
| PFI | See private finance initiative. | N6 |
| Phantom Stocks | Participation in a company based on the law of obligations, e.g. in the context of Management Participation. | N2 |
| Physical Data Room | A Data Room as commonly used until a few years ago. A physical data room consists of office space in which all the documents required for Due Diligence are assembled and made available for inspection. In some cases, both a Virtual Data Room and a physical data room are used, with highly sensitive information only being made available in the physical data room. The disadvantage of a physical data room is that it requires a lot of resources. Only a limited number of people can access it at any given time, the room is not available for other uses, it requires constant supervision, and the process of assessing the information in a physical data room is generally less efficient. Physical data rooms are increasingly being replaced by virtual data rooms. | N2 |
| Physical Obsolescence | a form of depreciation where the loss in value or usefulness of an asset is due to the decrease or expiry in its life from wear and tear, deterioration, exposure to various elements, physical stresses, and similar factors. See also Economic Obsolescence, and Functional Obsolescence. | N7 |
| Piggy Back Registration Rights | Registration Rights which permit private Securities holders to “piggyback” into a Registration Statement originally filed by the Issuer for a separate purpose. These rights give the holder the ability to “jump onto” an offering that another party (either the Issuer itself or another Security holder) initiated. Compare Demand Registration Rights. | N1 |
| PIK | Payment in Kind. | N2 |
| PIK | acronym for Pay-in-Kind | N1 |
| PIK Debt | debt where Interest is only paid in PIK | N1 |
| PIK Loans | loans that only pay interest by way of PIK | N1 |
| PIK Notes | perhaps the most common form of PIK Debt, being Notes with a PIK feature | N1 |
| PIK/Payment in Kind | fixed-income securities that generate interest in the form of additional debt instead of a sum of money. The final interest is only payable on the final maturity date | N4 |
| Pill | shorthand for Poison Pill | N1 |
| Pill Threshold | another name for a Pill Trigger | N1 |
| Pill Trigger | the percentage ownership of a company’s outstanding Stock the Acquisition of which will result in Rights issued under the Pill becoming exercisable for company Stock as a significant discount to market, thus activating the poison in the Poison Pill. Poison Pill plans today frequently use, a 15 percent Trigger, although a higher 20 percent Trigger or a lower 10 percent Trigger are not uncommon. In the case of NOL Pills, a five percent Trigger is the standard. | N1 |
| PIPE | acronym for “private investment in public equity.” In a PIPE transaction, a Public Company issues equity Securities to institutional Investors in a Private Placement and, if required for the relevant jurisdiction, undertakes to register the equity Securities for public resale promptly after the transaction closes. | N1 |
| Pipeline | see Deal Flow | N1 |
| Pitch | Presentation in which advisors (e.g. lawyers, M&A advisors, investment banks or auditors) compete to work on an upcoming transaction, usually in a Beauty Contest. | N2 |
| PJSC (Qatar) | acronym for public or private joint stock company, currently the only form of company permitted to list Shares on the QE | N1 |
| PJSC (UAE) | public or private joint stock company established under the UAE Companies Act | N1 |
| Placement Fee | a fee paid to the Investment Bank when the Bond placement occurs (i.e., when the Bond deal closes) | N1 |
| Placing | see Share Placing | N1 |
| plain vanilla | Describes financial instruments, especially bonds and derivatives, in their most basic form or with standard features. Opposite of exotic. | N6 |
| Plain Vanilla | Expression used to describe the simplest or most basic version of something. | N2 |
| plan sponsor | Employer that sets up and funds a pension plan for its employees. Also called scheme sponsor. | N6 |
| Plant/assets ratio | The percentage of total assets that is tied up in land, buildings and equipment. | N3 |
| Playbook | A M&A playbook helps companies facilitate a lean, structured approach and methodology to integrating newly acquired companies. Solutions provide meticulous documentation of how work gets done, ensures consistency and standardization across integration teams, as well as delivering continuous improvement of integration process flow and outcomes. | N3 |
| Players List | another name for a Working Group List | N1 |
| PLC | Public Limited Company. | N2 |
| Pledge | A form of security (see also4Share Pledge). | N2 |
| PLTA | Profit and Loss Transfer Agreement. | N2 |
| PMI | Post-merger Integration. | N2 |
| PMI / Post Merger Integration | the proper integration of the acquired company into the existing buying company has to be set up, planned and monitored | N5 |
| PMI/Post Merger Integration | the proper integration of the acquired company into the existing buying company has to be set up, planned and monitored. One of the tools often used for this purpose is the 100 day plan | N4 |
| PMO | Project Management Office. | N2 |
| PoA | Power of Attorney. | N2 |
| Poison pill | 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 |
| Poison Pill | Refers to measures intended to make a company unattractive when faced with the prospect of a Hostile Takeover (see also Shark Repellent). | N2 |
| Poison Pill | an action taken by a company to make its equity less attractive to potential Acquirers in order to prevent being acquired in a Hostile Takeover. Two common types of Poison Pills are the Flip-In, and the Flip-Over. Usually effected by an agreement (Shareholder Rights Plan) between a company and a trust company or similar corporate Fiduciary providing for the issuance to all of a company’s shareholders of a Warrant to obtain one Share of the company’s Stock at an Exercise Price that is far Out of the Money and further providing that any Acquisition by a third party of more than a specified amount of the outstanding Shares (usually, 10 percent, 15 percent or 20 percent) will, without any further act of the company, convert the Warrant into a Right to buy a multiple number of Shares of the company (perhaps as many as four or five) at half price, except for Warrants held by the third party which cannot be so exercised. The discriminatory nature of the Warrants, once triggered, makes their issuance vastly Dilutive. The Threat of such massive Dilution (the poison in the Poison Pill) serves as an effective economic deterrent to a purchase by a third party of more than the Pill Trigger amount of Stock. Poison Pills contain mechanisms that allow the company’s Board of Directors to disarm them and permit Acquisitions of company Shares in excess of the Trigger percentage in Board of Directors approved situations, thus permitting Friendly Share Acquisitions and Friendly transactions. Poison Pills are by far the most effective Takeover Defense. The effectiveness of the Poison Pill’s deterrence is demonstrated by the fact that, in the almost 30 years of the Poison Pill’s existence, there appear to have been only two instances in which a third party intentionally triggered a Poison Pill. While initially intended to be pejorative, the term Poison Pill has become ubiquitous and no longer has any meaningful negative implications. See also NOL Pill and Shelf Poison Pill. 1. (US) Poison Pills have been upheld numerous times in Delaware, beginning with the Household decision in 1985. See Moran v. Household Int’l, Inc., 500 A.2d 1346 (Del. 1985); see also Yucaipa Am. Alliance Fund II, L.P. v. Riggio, 1 A.3d 310 (Del. Ch. 2010) (applying Unocal Doctrine and upholding the adoption of a Poison Pill by directors of Barnes & Noble in the face of Yucaipa’s rapid Open Market Accumulation of Stock and threatened Proxy Contest), aff’d, 15 A.3d 218 (Del. 2011); Air Prods. & Chems., Inc. v. Airgas, Inc., 16 A.3d 48 (Del. Ch. 2011). 2. (UK) Rule 21 of the City Code restricts such Frustrating Actions 3. (FRA) the French Commercial Code and the AMF’s General Regulation strictly limit the use of such actions |
N1 |
| Poison pill strategy | The target company might issue convertible securities which are converted into equity to deter the efforts of offeror; such conversion dilutes the bidder’s shares and discourages acquisition. Or the target company might raise borrowings distorting normal debt: equity ratio. | N3 |
| Poison put | A covenant allowing the bond holder to demand repayment in the event of a hostile takeover. | N3 |
| Ponzi scheme | Fraudulent investment scheme which provides returns to investors either by using the funds already paid into the scheme by investors or by using the funds paid in by subsequent investors. The returns provided to investors in a Ponzi scheme are usually abnormally high or consistent. A Ponzi scheme usually collapses since the scheme makes no actual investments and requires continuous inflows of new capital to ensure that the money going into the scheme exceeds the money being paid out of the scheme as investment returns. In 2008, a Ponzi scheme operated by Bernard Madoff for several years collapsed. As a result, Madoff was responsible for the largest financial fraud to be committed (allegedly) by a single individual. | N6 |
| pooled fund | Vehicle in which a number of investors (including pension schemes) pool their assets so that they can be managed on a collective basis. This usually suits small to medium-size investors wishing to invest in a broad spread of investments or larger investors wishing to gain exposure to a specialised sector. Shares in a pooled fund are denominated in units that are repriced regularly to reflect changes in the underlying assets. This allows investors to value their holdings and provides a basis upon which transactions in units can take place. Unit trusts are examples of pooled funds. | N6 |
| portable alpha | See alpha transfer. | N6 |
| Portfolio | an assemblage of various assets, investments, or liabilities. | N7 |
| portfolio | Block of assets generally managed under the same mandate. | N6 |
| Portfolio Company | a company which has been purchased by a Private Equity Sponsor and now sits in that Private Equity Sponsor’s “portfolio” | N1 |
| Portfolio Discount | an amount or percentage deducted from the value of a business to reflect its ownership of dissimilar operations or assets in a combination that might not be attractive to a potential buyer. Also known as conglomerate discount | N7 |
| portfolio insurance | Any one of several techniques used to change systematically an investment portfolio’s market exposure in response to prior market movements, with the objective of avoiding large losses and securing as much participation as possible in any favourable market movements. These techniques often feature a principal guarantee. (See also principal guarantee.) | N6 |
| portfolio manager | See fund manager. | N6 |
| Possible Offer Announcement | used in the context of Hong Kong Takeovers and shorthand for the announcement of a possible Takeover Offer, subject to Rule 3.7 of the HK Takeovers Code | N1 |
| Post money value | the value of the company including the value of the cash paid when the capital is increased. This value usually serves as a reference for allocating shares | N4 |
| Post-acquisition Due Diligence | Post-closing Due Diligence. | N2 |
| Post-Bid Market Check | a Market Check conducted after receipt of a formal Acquisition Bid and prior to signing an Acquisition Agreement. Compare to Go Shop. | N1 |
| Post-closing Due Diligence | Review of the company by the buyer after completion of the transaction; the buyer typically now has access to all the information and is able to verify the details previously provided. If discrepancies are found, this may give rise to warranty or indemnity claims. Sometimes also referred to as Post-acquisition Due Diligence. | N2 |
| Post-M&A | Phase following completion of the transaction (Closing); see also Post-merger Integration. | N2 |
| Post-Merger Integration | a phase subsequent to the Closing of the Acquisition of a Target Company during which the Target Company is integrated into the Buyer | N1 |
| Post-merger Integration (PMI) | After a company has been acquired, the focus of post-merger integration is on ensuring that business operations are properly coordinated and synergies generated. This can involve many different areas of the company (e.g. IT, HR, contracts with customers and suppliers, public presence). How these tasks are handled is central to the success or failure of the transaction. Shortcomings in this phase can also expose management to liability risks. | N2 |
| Post-money | Value of a company after a round of financing; the opposite is Pre-money. | N2 |
| Post-money value | “Post-money valuation is the value of a company after an investment has been made. This value is equal to the sum of the pre-money valuation and the amount of new equity. External investors, such as venture capitalists and angel investors, will use a pre-money valuation to determine how much equity to demand in return for their cash injection to a company. The implied post-money valuation is calculated as the dollar amount of investment divided by the equity stake gained in an investment.” | N3 |
| Post-Money Value | a business’ implied aggregate value immediately following its most recent round of financing. Contrast with Pre-Money Value | N7 |
| Power of Attorney | an instrument permitting an individual to serve as the attorney or authorized agent of the grantor. In the Secondary offering context, selling shareholders will generally grant a Power of Attorney to someone (often a company officer) authorizing that person (an “attorney in fact”) to sell to the Underwriters the number of Shares listed in the Underwriting Agreement and to execute the Underwriting Agreement (not used in Hong Kong). Generally signed in combination with a custody agreement. Powers of Attorney are also typically found in security agreements, granted by the chargors in favor of the security agent to allow the security agent to complete any tasks imposed on the chargor, which it has failed to complete. | N1 |
| Power of Attorney (PoA) | Legal authorisation that allows a person to act on someone else’s behalf. | N2 |
| PPF | See Pension Protection Fund | N6 |
| PPP | Public Private Partnership. | N2 |
| PR | see Public Relations | N1 |
| PRA | acronym for the UK Prudential Regulation Authority | N1 |
| Pre Bid Market Check | a Market Check conducted prior to receipt of a formal Acquisition Bid | N1 |
| Pre money value | the value of the company excluding the value of the cash paid when the capital is increased | N4 |
| Preamble | Section at the start of an agreement which outlines the background to the transaction and the intentions of the parties. The content of the preamble is of major importance in interpreting the provisions in the agreement. | N2 |
| Pre-Closing | the time prior to Closing when you complete all the work so you can have a smooth Closing | N1 |
| Preclusive | when used in the context of a discussion of Fiduciary Duties of a Target Company’s Board of Directors, Preclusive means a Takeover Defense that by its structure or effect prevents all or certain types of Takeover Bids, even if shareholders would want to accept them. Preclusive doesn’t address shareholder choice; rather, it addresses things that would prevent a Takeover Bid, thus mooting the issue of shareholder choice. | N1 |
| Predator, offeror, acquirer | The company which is making a bid for the merger or takeover of another company | N3 |
| Preemptive Bid | an Acquisition Proposal with such good terms, including in particular price, that it closes off (or, more frequently, is perceived to close off) any possibility of receiving a better Competing Bid. Determining whether a Bid is truly preemptive in an Acquisition context is challenging unless the Acquisition process is an Auction open to all comers, the Bid is received during the Auction and all other Bidders drop out. As a result, most Preemptive Bids are matters of perception, not fact. | N1 |
| Pre-emptive Right, Pre-emption Right | Similar to a Right of First Refusal; the beneficiary of this arrangement can step into an agreement made between the seller and a third party on the same terms as the prospective buyer. Arrangements of this type are common where the intention is to exclude outside shareholders, e.g. in the case of a Joint Venture. | N2 |
| Pre-emptive Rights | existing shareholders’ rights to first refusal on the transfer of existing Shares or the issue of new Shares by a company, unless such rights are specifically not applied. See also Dilution. 1. (UK and HKG) known as pre-emption rights |
N1 |
| Preference Rights | Priority rights in relation to dividends or the proceeds of liquidation (see also Liquidation Preference). | N2 |
| preference share | Type of share which gives the holder an entitlement to a fixed rate of dividend that is paid before any dividends are paid to ordinary shareholders. In the event of a company wind-up, preference shareholders rank ahead of ordinary shareholders as creditors. | N6 |
| Preference shares | These fall between debt and equity. They usually carry no voting rights and have preferential rights over ordinary shareholders regarding dividends and ultimate repayment of capital in the event of liquidation | N5 |
| Preference Shares | see Preferred Stock | N1 |
| Preferred Bidder | An Auction Process involves several potential buyers. Since a seller is typically not able to conduct intensive negotiations with all the interested parties at the same time, in most cases it will select what appears to be the most attractive proposal from among the indicative bids (Indicative Bid / Indicative Offer) submitted by the prospective buyers and negotiate primarily with this party, the preferred bidder. Focusing (provisionally) on a single preferred bidder is one way of reducing the management workload associated with multiple bids. | N2 |
| Preferred Bidder | the potential Buyer whom the Seller or Target Company chooses as the preferred Purchaser after the submission of the Indicative Bid; often the parties agree upon Exclusivity in such case | N1 |
| Preferred Equity Certificate | hybrid Instruments, usually issued by a Luxco, which are treated as debt for the issuing company and equity for the holder with the interest paid on PECs being treated as dividends in the hands of the holder. Private Equity Certificates can also be issued as Instruments Convertible into equity. See CPECs. | N1 |
| Preferred Shares | see Preferred Stock | N1 |
| Preferred Stock | Preferred Stock sits in between debt and Common Stock in the Capital Structure. Preferred Stock has Priority over Common Stock in a Liquidation, generally pays a fixed dividend (the equivalent of the Interest paid on debt) and does not share in the Upside to the same degree as Common Stock. Preferred Stock may have various different kinds of attributes which may notably concern dividend (fixed dividend, priority dividend), voting rights (double, multiple or no voting rights), company governance (grants the ability to elect a certain number of directors), etc. Outside of the US, the terms Preferred Shares or Preference Shares are used. | N1 |
| pre-hedging | Practice of a bank assembling a position over a period of time prior to entering into a swap contract — this reduces the bank’s risk of hedging the swap position and is only legal when authorised by the client. | N6 |
| Preliminary Bid | see Preliminary Offer | N1 |
| Preliminary Draft | See Heads of Agreement / Heads of Terms Lol MoU | N2 |
| Preliminary Offer | a prospective Purchaser’s non-binding first Offer to enter into an Acquisition Agreement regarding the Acquisition of a company or assets (generally made in an Auction). Also referred to as an Indicative Bid or a Preliminary Bid. | N1 |
| Premise of Value | an assumption regarding the circumstances that may be applicable to the subject valuation. See also Going Concern Value and Liquidation Value | N7 |
| premium | a. For securities selling above par, the difference between the price of a security and par. b. Amount that must sometimes be paid above par in order to call an issue — that is, a call premium. c. Occasionally used and interchangeable with margin or spread when the latter two refer to a percentage above a given amount or rate. | N6 |
| Premium Listing | companies with a Premium Listing of equity on the LSE must comply with standards of regulation and disclosure that are super-equivalent to the relevant EU Directives, including as to corporate governance. Global Depository Receipts (similar to ADRs) and debt cannot obtain a Premium Listing. See also Standard Listing and Listing Rules | N1 |
| Pre-money | Value of a company before a round of financing; the opposite is Post-money. | N2 |
| Pre-money value | “A pre-money valuation is a term widely used in private equity or venture capital industries, referring to the valuation of a company or asset prior to an investment or financing. If an investment adds cash to a company, the company will have different valuations before and after the investment. The pre-money valuation refers to the company’s valuation before the investment. External investors, such as venture capitalists and angel investors will use a pre-money valuation to determine how much equity to ask for in return for their cash injection to an entrepreneur and his or her startup company. This is calculated on a fully diluted basis. Usually, a company receives many rounds of financing (conventionally named Round A, Round B, Round C, etc.) rather than a big lump sum in order to decrease the risk for investors and to motivate entrepreneurs. Pre- and post-money valuation concepts apply to each round.” | N3 |
| Pre-Money Value | a business’ implied aggregate value immediately preceding its most recent round of financing. Contrast with Post-Money Value | N7 |
| Pre-Pack | the term generally used to describe any Insolvency proceeding or arrangement in which the Restructuring plan has been fully agreed to and the necessary approvals already obtained before filing for Insolvency. In England, Pre-Pack is more specifically used in relation to Administration proceedings, in which a sale of the company’s assets has been pre-agreed by the prospective Administrator, and will be implemented immediately upon his/her appointment. | N1 |
| prepayment risk | Risk which affects investors in CDOs and MBSs that the borrowers/writers of the underlying debt may choose to repay the loan early if interest rates fall, under conditions where investors are unable to reinvest the proceeds to achieve the redemption yield targeted at outset. | N6 |
| present value | Value in today’s terms of future cash flows discounted at some appropriate rate of interest. | N6 |
| Present Value | the value, as of a specified date, of expected Economic Income, calculated using a Discount Rate. See also Net Present Value | N7 |
| Price | the monetary or other consideration asked, offered, or paid for an asset, which may be different from the value | N7 |
| price earnings ratio | See P/E ratio. | N6 |
| Price Sensitive Information | see Inside Information | N1 |
| Price/Earnings Ratio | a business’s market price per Share divided by the Earnings Per Share. The P/E Multiple is sometimes applied to a business’s profits to calculate the value of the business. | N1 |
| price-to-book ratio | Comparison of a security’s market value with its book value, calculated by dividing the current closing price of a security by the latest published book value per share. | N6 |
| primary market | Market in which securities are sold at the time they are first issued. (See also secondary market.) | N6 |
| prime | Describes a property investment that is highly regarded in terms of location, age and condition, quality of tenant, size, and lease structure. | N6 |
| prime broker | Agent, usually an investment bank, offering a suite of services including securities lending, cash management and execution of leverage trades. The services of a prime broker are most often used by hedge fund investors in the interests of managing absolute return investments. | N6 |
| prime rate | Minimum interest rate in the US that commercial banks will charge borrowers. (See also base rate.) | N6 |
| principal | Capital element of a bond that is normally repaid at par value (usually 100) at the end of the term of the bond. (See also nominal value.) | N6 |
| Principal | Person on whose behalf an Agent acts. | N2 |
| principal guarantee | Feature of certain portfolio insurance products, usually achieved by investing part of the principal amount in a zero coupon bond that will eventually return the amount invested over the agreed period of the investment. (See also cushion, portfolio insurance.) | N6 |
| Prior Transaction Method | a method within the Market Approach that uses previous transactions involving the subject business as an indicator of value. Also known as subject company transaction method or recent transaction method | N7 |
| Private Company | a company with Shares that do not trade in public markets. The term is often used in counter-distinction to the term Public Company. | N1 |
| Private Company Limited by Shares (Ltd.) | Corporate form in the UK (and other countries), comparable with the German “GmbH” in terms of function. The abbreviation “Ltd.” is commonly used. | N2 |
| private customer | Category of investor (as required by the FSA), typically small companies/trusts, which, as one of the more vulnerable investor categories, are given significant protection under the conduct of business rule. (See also non-private customer.) | N6 |
| private equity | Shares in unquoted companies. Usually high risk, high return in nature. | N6 |
| Private equity | In finance, private equity is an asset class consisting of equity securities and debt in operating companies that are not publicly traded on a stock exchange. A private equity investment will generally be made by a private equity firm, a venture capital firm or an angel investor. Each of these categories of investor has its own set of goals, preferences and investment strategies; however, all provide working capital to a target company to nurture expansion, new-product development, or restructuring of the company’s operations, management, or ownership. Private equity is also often grouped into a broader category called private capital, generally used to describe capital supporting any long-term, illiquid investment strategy. | N3 |
| Private Equity | a generic term sometimes used as shorthand for a Private Equity Sponsor and/or the business of raising and managing Private Equity Funds | N1 |
| Private Equity (PE) | Equity provided privately, i.e. not via the stock exchange; many investment companies specialise in private equity. A private equity investor often takes a majority stake in a company, enabling him to influence operational management. By contrast, a Venture Capital Investor usually invests in firms that are still at an early stage of development. It is not uncommon for a private equity investor to aim to hold a stake for three to five years until Exit. | N2 |
| Private Equity (PE) fund | an investment fund active in mature cash flow generating companies that also attract debt financing for the acquisitions and actively involves management in the acquisition | N5 |
| Private Equity (PE) fund | an investment fund active in mature cash flow generating companies that also attracts debt financing for the acquisitions and actively involves management in the acquisition. | N4 |
| Private Equity Fund | a discrete entity that consists of third party funds managed by a Private Equity Sponsor which are intended to be invested primarily in LBO type deals. A Private Equity Fund is typically an LP in which Investors are Limited Partners and the Private Equity Sponsor (directly or through subsidiaries) is the General Partner. Some Private Equity Funds are constituted as corporations or other types of business entities. | N1 |
| Private Equity Shop | another name for a Private Equity Sponsor | N1 |
| Private Equity Sponsor | a firm which manages third party funds dedicated in whole or in part to being used as the equity component of Acquisition Consideration. Typically, a Private Equity Sponsor specializes in Leveraged Buyout transactions in which equity contributed by one or more Private Equity Funds comprises a minority of the Acquisition Consideration and borrowed funds comprise the majority. The Private Equity Sponsor’s representative in a meeting will be the one asking why things cannot be done faster. | N1 |
| private finance initiative (PFI) | System for providing capital assets for the provision of public services. Typically, the private sector designs, builds and maintains infrastructure and other capital assets and then operates those assets to sell services to the public sector. In most cases, the capital assets are accounted for on the balance sheet of the private sector operator. The pricing basis for the services provided almost invariably includes an inflationary element. | N6 |
| Private Limited Company | Private Company Limited by Shares. | N2 |
| Private placement | in a private placement, the company raises capital by selling shares privately to venture capital companies, private equity companies, institutional investors and other investors, instead of holding a public offering of shares. | N5 |
| Private placement | in a private placement, the company raises capital by selling shares privately to venture capital companies, private equity companies, institutional investors and other investors, instead of holding a public offering of shares. | N4 |
| Private Placement | the sale of a block of Shares in a Private Company to an investment institution. Private Placements normally do not involve any Change of Control of the business. They can occur when shareholders wish to retire or, for some other reason, wish to realize all or part of their holdings. See also PIPE. | N1 |
| Private Placing | see Private Placement | N1 |
| Private Treaty Sale | the sale of a company or business in which the Seller and Buyer agree on the terms of sale between themselves | N1 |
| Privatisation | in its broadest meaning, refers to the elimination of all public ownership in a Public Company. Typically used instead of the terms Going Private or Take Private. | N1 |
| Pro Forma | means “for the sake of form” in Latin. A Pro Forma analysis assumes an Acquisition or other contemplated future event has occurred and reflects the financial impact of the contemplated future event on selected financial measures. | N1 |
| Pro Forma Financials | a kind of Pro Forma analysis consisting of Financial Statements calculated to reflect the impact of contemplated future events as if they had already occurred. These are the “what if?” numbers. For example, a company could have one million dollars of debt on its Balance Sheet as of December 31. If that company plans to borrow another one million dollars of debt in January, the company’s December 31 debt, Pro Forma for the January borrowing, would be two million dollars. | N1 |
| Pro Rata | Proportional; corresponding to the respective stake held in the company. | N2 |
| Pro Rata Acceptance | a mechanism for dealing with an Oversubscribed amount of a Capped type of consideration in which all electing or tendering Target shareholders receive a proportionate amount of the Capped type of consideration 1. (US) in a Partial Offer, where the Bidder seeks only a portion of the Target Company’s Stock and the total consideration is accordingly Capped, provisions in the Williams Act mandate pro rata allocation of the Capped type of consideration. The Williams Act does not apply to Mergers that include two types of consideration, at least one of which is Capped. In a Merger, if the Capped type of consideration is Oversubscribed, the Merger Agreement may provide for allocating the Capped type of consideration either on a Pro Rata or a Per Capita Acceptance basis. Because pro rata allocation of the Capped form of consideration may create unfavorable tax results for certain stockholders, very few Cash Election or Stock Election Mergers use a pro rata allocation methodology. Compare Per Capita Acceptance, which most Cash Election or Stock Election Mergers use. 2. (HKG) typically used in the context of a Rights Issue |
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| Pro Supp | shorthand for Prospectus Supplement | N1 |
| Probability-Weighted Expected Return Method (PWERM) | a scenario-based technique used to estimate the value of an equity interest based on the probability-weighted present value of various discrete future outcomes for the business (i.e., initial public offering, sale, dissolution, or continued operation until a later exit date) | N7 |
| Procedure Plan | Plan in which all the transaction steps (together with the associated documents, deadlines and persons responsible) are listed in chronological order to ensure an orderly transaction process and smooth implementation. It is advisable to prepare a procedure plan before the transaction gets under way, especially in the case of complex scenarios. | N2 |
| Process letter | the process letter contains information on how the seller wants to organize the sales process, by which date a bid is expected and what requirements it must meet and how the next phase will look after that bid. | N4 |
| Process letter | A process letter defines how the seller organizes the sales process. It includes such items as: – by which date a bid is expected – acquirer’s requirements – conditions of sales process | N3 |
| Process Letter | Document which is prepared at the start of a transaction; it is especially important in an Auction Process due to the structured rounds of negotiation that interested parties need to go through. A process letter provides details of the process and timeframe and is sent to prospective buyers and their advisors. In other words, the document lays down the ground rules for everyone in advance. In addition to deadlines for submitting bids, it also includes the timeframes for carrying out Due Diligence, Expert Calls, the Q&A Process and other process details. | N2 |
| Process Letter | see Bid Process Letter | N1 |
| profit and loss statement | Summary of a company’s revenues and expenses over a specific period, which shows whether the company has made a profit or a loss. Also known as an income statement. | N6 |
| Profit and Loss Statement | another name for Income Statement | N1 |
| Profit and Loss Transfer Agreement (PLTA) | Agreement between two companies, often as part of a combined control and profit transfer agreement. In this type of affiliation agreement the dependent company must transfer all its profits to the controlling company. In return, the controlling company is required to bear all the losses made by the dependent company. It is important to scrutinise affiliation agreements very closely, especially from a tax viewpoint. | N2 |
| program trading | Computerised trading used primarily by institutional investors, typically for large volume trades, where orders from the trader’s computer are entered directly into the market’s computer system and executed automatically. | N6 |
| Project Finance | a type of non-recourse financing or limited recourse financing whereby a project developer (known as the “project company,” which is formed by a “project sponsor”) incurs debt, often in combination with equity contributed by the project sponsor, to finance the development and construction of a capital-intensive project, such as a power plant or toll road, typically by means of construction loans that convert to Term Loans upon Completion of the project. A primary feature of Project Finance is that the Lenders advance debt on the basis of their evaluation of the project’s projected revenue-generating capability, rather than the credit quality of the project sponsor or the value of the project assets. The equity of the project company and the project assets, including the project’s revenue-generating contracts and other cash flows, are pledged as collateral for the debt. If you would like to know more about Project Finance, visit Latham’s Book of Project Finance Jargon®, available at www.lw.com. | N1 |
| Project Management Office | Organisational entity within a company responsible for creating, implementing and developing the project management system, e.g. in the context of Post-merger Integration. | N2 |
| property unit trust | Unit trust that invests in commercial properties on behalf of third parties, usually pension schemes and charities. | N6 |
| Proration | the results of Pro Rata Acceptance | N1 |
| Proration Factor | the percentage of Shares of Stock tendered that will be accepted in a Pro Rata Acceptance | N1 |
| Proration Period | the period of time during which Shares may be tendered or elections submitted in an Acquisition in which an Oversubscribed type of consideration will be subject to Pro Rata Acceptance | N1 |
| Pro-sandbagging Clause | Provision in a sale and purchase agreement stipulating that the recipient of a warranty may rely on it even if he was aware that it was incorrect at the time it was given. In such cases, the impact of information asymmetry, e.g. as a result of Due Diligence, can be particularly significant (see Anti-sandbagging Clause; Sandbagging). | N2 |
| prospectus | Legal document offering securities for sale. Provides potential investors with detailed information on the operations and business plans of the issuing company and their objectives or intentions for the use of the money. | N6 |
| Prospectus | a document required by law when issuing financial products (e.g. shares, bonds, investment funds, etc.) which sets out the terms and conditions of the issue. | N4 |
| Prospectus | plural is “Prospectuses.” Often referred to as an Offering Memorandum or Offering Circular. 1. (US) registered or public offerings are effected through the use of a marketing document called a Prospectus included in the Registration Statement filed with the SEC. This document forms the core of the sales material and the participants’ liability. 2. (UK, DEU, FRA, ITA) a Prospectus is used to describe the offering document prepared to comply with the Prospectus Directive either to achieve a listing on a Regulated Market or to make another form of Offer to the public 3. (ESP) a Prospectus is used to describe the offering document prepared to comply with the Prospectus Directive and the development regulation, specifically Royal Decree 1310/2005 either to achieve a Spanish listing on a Regulated Market or to make an Offer to the public 4. (HKG) a Prospectus is used to describe any document offering to the public (or calculated to invite offers from the public for) any Shares in or debentures of a company, for subscription or purchase for cash or other consideration 5. (SGP) the Securities and Futures Act defines Prospectus as any prospectus, notice, circular, material, advertisement, publication or other document used to make an Offer of Securities, and includes any document deemed to be a Prospectus under Section 257 of the Securities and Futures Act (i.e., a document by which a subsequent Offer is made), but does not include: (i) a profile statement; or (ii) any material, advertisement or publication which is authorized by Section 251 of the Securities and Futures Act (other than Subsection (5)) 6. (UAE) a Prospectus or Offering Memorandum is used as a marketing document for Shares in public joint stock companies |
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| Prospectus Directive | the Prospectus Directive effectively harmonizes all of the Prospectus Disclosure requirements across all EEA Member States. The PD applies if either the Securities are to be listed on a Regulated Market or a public Offer is made in a Member State. See PD. | N1 |
| Prospectus Rules | the rules introduced to implement the Prospectus Directive. Broadly, Prospectus Rules require the issue of a Prospectus, unless an exemption applies, whenever there is either an Offer of transferable Securities to the public in the relevant jurisdiction or a request for the admission to trading of transferable Securities on a Regulated Market. Prospectus Rules set out the form, content and approval requirements for Prospectuses. | N1 |
| Prospectus Supplement | a document that updates, corrects or otherwise amends a Prospectus. For example, a Shelf Registration Statement contains two parts: the Base Prospectus (which is in the initial filing) and the Prospectus Supplement containing the relevant terms of the offering and any necessary updates (which is filed when the Issuer sells Securities in a Shelf Takedown). Also referred to as Pro Supp. 1. (HKG) the term Supplemental Prospectus is more commonly used |
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| protection overlay | Portfolio management technique by which an investment manager aims to protect the capital value of a portfolio through risk management techniques such as dynamic hedging. | N6 |
| Provisions | 1. Stipulations, requirements or clauses in a contract. 2. “Provisions” is also a term used in accounting. Provisions must be recognised if an outflow of economic resources is expected in the future. Unlike Accruals, the timing and the amount of the future liabilities are uncertain (see IAS 37). | N2 |
| Proxy | the most common meaning is a document (technically, a Power of Attorney) making the holder a stockholder’s agent, with limited or unlimited authority, to vote the Shares covered by the Proxy. Another meaning of the word Proxy is a person who holds the Power of Attorney created by the Proxy. See also Proxy Statement. 1. (US) virtually all Shareholders’ Meetings of US Public Companies conduct Share voting through the distribution of forms of Proxy (see also Proxy Card) to shareholders of record entitled to vote. Those executed by the shareholders of record are the Proxies that determine all voting at the meeting. All facets of Proxy voting at Public Companies that have Stock registered under the 1934 Act are governed by the SEC Proxy rules, as well as by state law relating to the conduct of Shareholders’ Meetings. 2. (HKG) where a shareholder is not personally present to cast his/her vote at a Shareholders’ Meeting, he/she may appoint another person to vote on his/her behalf. Such a person is known as a Proxy. 3. (SGP) for a Singapore incorporated company, where a shareholder is not personally present to cast his/her vote at a Shareholders’ Meeting, he/she may appoint an agent to vote on his/her behalf. Such an agent is known as a Proxy. |
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| Proxy Access | a general name for a process pursuant to a company’s Charter or Bylaws or pursuant to a SEC Rule that permits a company’s shareholder (which meets certain minimum ownership tests, including duration of ownership) to require the company to include in the company’s Proxy Materials and Proxy Card the shareholder’s proposed nominee for election to the company’s Board of Directors. Proxy Access has been controversial since the SEC broached the idea in 2002, and the idea’s future is currently uncertain. | N1 |
| Proxy Advisory Firms | a firm that reviews Proxy Statements and makes recommendations to its clients on how to vote their Shares on various ballot issues. Clients of Proxy Advisory Firms consist almost entirely of institutional Investors. Some clients follow a policy of voting in accordance with their Proxy Advisory Firm’s recommendations, others make their own judgments using the Proxy advisor’s recommendations as a key, but not, exclusive input. 1. (US) in addition to making voting recommendations, the two principal Proxy Advisory Firms also act as an agent for their clients in submitting votes through the tabulation system run by Broadridge. The two principal Proxy Advisory Firms are ISS and Glass Lewis, which control well over 90 percent of the market. |
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| Proxy battles | They take place when the agenda items at the meeting are likely to be opposed by dissident shareholders. Management of the company collect proxies to face these opponents in the meeting of Board of Directors. | N3 |
| Proxy Card | the common name given to forms of Proxies distributed in connection with Shareholders’ Meetings. Proxy Cards for many years were designed so they could be tabulated by an IBM card reader. While this is no longer the means by which Proxy Cards are tabulated, the almost universal custom is to print them, usually on card stock, using the same dimensions as the original IBM Proxy Cards. The term Proxy Form is also commonly used. 1. (HKG) in Hong Kong, the term used is Proxy Form and it is typically not printed on card stock | N1 |
| Proxy Contest | a contest between two or more adversarial interests who compete to win an election contest or other contested shareholder vote at a Shareholders’ Meeting. The Board and Management or most of the Board and Management are usually on one side. The adversary may be Dissident members of the Board or Management, a long-time shareholder (either small or large) or a newly arrived shareholder (either small or large). The Proxy Contest may be over election of as few as one and as many as all directors, and/or over any aspect of corporate policy an Insurgent chooses on which to base a contest. | N1 |
| Proxy Form | see Proxy Card | N1 |
| Proxy Law (Qatar) | refers to Law No. (25) of 2004 prohibiting any natural or legal person in Qatar from “harbouring” any non-Qatari. “Harbouring” includes allowing a non-Qatari shareholder from circumventing any restrictions that may be applicable to the foreign Investor under law. | N1 |
| Proxy Materials | a generic name for all writings generated in the context of soliciting Proxies with respect to a Shareholders’ Meeting | N1 |
| Proxy Solicitor | a firm that assists principals in soliciting, obtaining and counting Proxies in connection with a Shareholders’ Meeting. Proxy Solicitors advise on Proxy Statement content and on solicitation strategy. A Proxy Solicitor usually takes principal responsibility for ensuring Proxy votes are collected and accurately counted. | N1 |
| Proxy Statement | traditionally consists of the principal communication (written or published electronically) to shareholders with respect to the voting of Proxies. Other materials involved in a Proxy solicitation consist principally of the Proxy Card and Proxy Statement supplements. Compare Shareholders’ Circular. | N1 |
| proxy voting | Delegation of voting rights without attendance at a shareholders’ meeting. | N6 |
| prudence | Legal principle of “the prudent man” is a measure by which the decision making of the individual or organisation could be evaluated in comparison with what a reasonable person would have been expected to do. | N6 |
| prudent man rule | Common rule pertaining to fiduciary duty in Anglo-Saxon countries. The OECD states the rule in terms of the following broad principle: “A fiduciary should discharge his or her duties with care, skill, prudence and diligence that a prudent person acting in a like capacity would use in the conduct of an enterprise of like character and aims.” Applications vary by country. | N6 |
| Prudential Regulation Authority | in 2013, the Prudential Regulation Authority or PRA became the UK’s prudential regulator for deposittakers, insurers and designated investment firms. See also Financial Services Authority and Financial Conduct Authority. | N1 |
| Prudential Regulation Authority (PRA) | Independent body formed as one of the successors to the Financial Services Authority (FSA), focusing on the prudential regulation and supervision of the financial services industry in the UK. | N6 |
| Public Auction | when Seller or a Target intentionally publicizes an Auction. Public Auctions very often include a large number of potential Bidders | N1 |
| Public Company | a generic term for a Listed Company 1. (US) a company with Shares registered under the Exchange Act 2. (HKG) generally means a company whose Shares are listed on the Hong Kong Stock Exchange or other stock exchanges but in some circumstances, may mean a company whose Shares are not listed for trading in Hong Kong but is still considered a Public Company in Hong Kong under the HK Takeovers Code and the Companies Ordinance |
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| Public Company Merger Agreement | a Merger Agreement (or other type of Combination Agreement) where the Target Company is a Public Company | N1 |
| Public Float | the portion of a company’s outstanding Shares held in the hands of public Investors, as opposed to company officers, directors, or controlling-interest Investors. Also referred to as Free Float. Listing Rules often contain specific guidance as to which Shares are considered to be held in public hands and counted as part of the Public Float. | N1 |
| Public Limited Company (PLC) | Corporate form in the UK, comparable with the German “AG” (Aktiengesellschaft) in terms of function. The abbreviation “PLC” is commonly used. | N2 |
| public offering | Offering for sale of a new issue of securities to the general investing public. Securities of such an offering will generally be placed through a syndicate, will have securities issued in small denominations and will be listed on a stock exchange. An IPO is the first public offering of a security. | N6 |
| Public Private Partnership (PPP) | Involvement of private companies in delivering public facilities and services, especially infrastructure projects; it is important to consider the public law aspects in such scenarios. PPPs can take many different forms. | N2 |
| Public Relations | refers to the department, personnel or outside firm that manages the dissemination of information about a company to its shareholders, the public, the media, its employees, or any other constituents interested in the company’s goings-on. See also Investor Relations. | N1 |
| Public to Private | describes a transaction whereby a public Listed Company is acquired by a privately owned entity and subsequently delisted. See also P2P and Take Private. | N1 |
| Punitive Damages | A concept derived from US law which enables a victim in a civil case to be awarded compensation that exceeds the actual loss sustained. No punitive damages are granted under German law. | N2 |
| Purchase Accounting | an accounting method used for all Business Combinations, such as Mergers, consolidations and Stock Acquisitions, initiated after June 30, 2001. Purchase Accounting treats the Acquirer as having purchased the assets and assumed the liabilities of the acquired company on the date of the Acquisition. The Book Values of the acquired assets and liabilities are reset to their respective fair market values as of the Acquisition date, and the difference between the purchase price and the aggregate fair value of the assets acquired is attributed to Goodwill. | N1 |
| Purchase Agreement | shorthand for a Stock Purchase Agreement, Share Purchase Agreement, or an Asset Purchase Agreement in an M&A deal. Also shorthand for the agreement with the initial purchasers in a US Rule 144A Financing. Make sure you know which is being discussed. | N1 |
| Purchase and Sale Agreement | see Sale and Purchase Agreement | N1 |
| Purchase Price Adjustment | The assumed position at the time of the agreement is verified after Closing, with the result that the price can be adjusted upwards or downwards if the actual position turns out to be worse or better than the assumed position. The parties agree in the contract on specific mechanisms for making the adjustment, for example Cash Free / Debt Free. | N2 |
| Purchase Price Adjustment | a generic term for any mechanism built into an Acquisition Agreement which, if triggered, would change the amount of consideration (either up or down) received by Target Company shareholders. Purchase Price Adjustments are common in Acquisitions of Private Companies, but rare in Acquisitions of Public Companies. See also Locked Box. | N1 |
| Purchase Price Allocation | a term commonly used to describe the process of allocating the price paid in a business combination among the assets acquired and liabilities assumed of the target business, using a variety of methods | N7 |
| Purchaser | another name for an Acquirer, Bidder or Buyer | N1 |
| Purchaser Due Diligence | Due Diligence carried out by the buyer, which is the norm in most cases | N2 |
| Pure play | a company that focuses exclusively on a product or sevice in order to obtain a large market share. | N5 |
| Purple Book | UK slang for the Handbook | N1 |
| Pushdown | a procedure often used in LBOs where Borrowers “push down” debt from the Holdco to the operating companies to ensure a tax-efficient structure and to allow Lenders to take guarantees over the assets of the operating companies. See also Hive-down. | N1 |
| PUSU | see Put-Up or Shut-Up | N1 |
| put option | Option which gives the purchaser the right, but not the obligation, to sell an asset at an agreed price or an agreed date (European option) or before an agreed date (American option). (See also call option.) | N6 |
| Put Option | Option conferring the right (but not the obligation) to sell securities (Underlying) within a certain period (American put option) or on a specific date (European put option). The put option may be structured in personam (i.e. under the law of obligations) or in rem (based on a property right). In the case of a put option under the law of obligations, exercise of the option merely creates an obligation on another party to accept the transfer of the securities. In a put option based on a property right, the option holder can bring about transfer of title by means of a unilateral declaration of intent, without further involvement of the other party being required. The opposite of a put option is a Call Option. | N2 |
| Put Option | a financial contract between a Buyer and a Seller, where the Seller has the Option to sell a specific quantity of a commodity, Security or other financial Instrument to the Buyer at prices and within time periods that are stated in the contract. High Yield Bond and some Investment Grade Indentures generally provide bondholders with this right upon a Change of Control of the Issuer. See Change of Control Covenant and Change of Control Provision. More generally, a Put Option, or Put Right, is an asset holder’s right to require another party to purchase the asset, usually at a predetermined price. Compare Call Option. | N1 |
| Put Right | see Put Option | N1 |
| put-call parity | Relationship that always exists between the price of a European put option and a European call option on the same underlying asset at the same strike price. | N6 |
| puttable bond | Bond that can be redeemed before maturity at the option of the bondholder. | N6 |
| Put-Up or Shut-Up | the deadline by which a potential Offeror on a Takeover either has to announce a firm Offer or walk away. See PUSU. | N1 |
| PV01 | The change in present value of an asset or liability for a 1 basis point change in the nominal yield curve used to value the asset or liability. | 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, avaiblable 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.