|T|
| M&A Term | Definition | Note |
| T+1, T+2, T+3 | Abbreviations that refer to the settlement date of security transactions. The T stands for the day the transaction takes place. The numbers 1, 2 and 3 denote how many days after the transaction date the settlement or the transfer of money and security ownership takes place. | N6 |
| TAA | See tactical asset allocation. | N6 |
| tactical asset allocation (TAA) | Short-term deviation from a strategic asset allocation to exploit predicted short-term relative movements in markets with the aim of generating excess return relative to a benchmark (typically, the strategic asset allocation). (See also strategic asset allocation.) | N6 |
| tactical asset allocation overlay | Portfolio management technique which gains exposure to asset classes through derivatives rather than physical securities. Its economic exposure is typically much larger than the assets of the overlay portfolio, which are used to fund margin payments and close off positions. As a result, it is used as an overlay to a larger fund to adjust its asset allocation with the aim of taking advantage of short-term movements and opportunities in the markets. | N6 |
| Tadawul | the Saudi Stock Exchange including where the context permits any committee, sub-committee, employee, officer, servant or agent to whom any function of Tadawul may for the time being be delegated, and “on Tadawul” means any activity | N1 |
| Tag | see Tag-Along | N1 |
| Tag along | a right included in the shareholder agreement to sell the shares if the other party also sells its package of shares. In contrast, to drag along, this does not involve an obligation but merely a right. | N5 |
| Tag along | a right included in the shareholder agreement to sell the shares if the other party also sells its package of shares. In contrast to drag along, this does not involve an obligation but merely a right | N4 |
| Tag-Along | provisions are commonly used to protect minority shareholders, by giving them the right to require a shareholder selling its Shares to a third party to also acquire the minority shareholders’ Shares — the minority shareholders are able to “tag along” with the selling shareholder. Compare Drag-Along. Also referred to as a Co-Sale right. | N1 |
| Tag-along Right | Right typically held by a minority shareholder to insist that his shares are bought on the same terms when shares are sold by the majority shareholder; sometimes a minimum threshold applies before the right is triggered. |
N2 |
| Tail | a period of time after termination of the principal agreement during which benefits or payments may become payable contingent on certain events. For example, most Investment Bankers’ Engagement Letters for M&A transactions specify that for a period following termination of the agreement (typically ranging from six to 18 months) the Investment Banker will be paid its agreed upon fee, if the client signs up for or completes a transaction that would have entitled the banker to a fee if it had occurred before the termination of the Engagement Letter. The underlying idea is to protect the Investment Banker against a client terminating the engagement just before agreeing to a deal and to recognize that there usually is a strong element of “but for” causation between the banker’s work on behalf of the client and a deal occurring shortly thereafter (shortly being a relative term in this context). | N1 |
| tail risk | A form of portfolio risk that arises when the possibility that an investment will move more than three standard deviations from the mean or expected return, is greater than what is shown by a normal distribution. | N6 |
| Take Down | a generic term for accepting tendered Securities in a Tender Offer or Exchange Offer and releasing the payment for the Securities. Take Down also frequently describes the process by which a Borrower obtains funds under a loan agreement, usually by satisfying conditions precedent to the disbursement of loan proceeds. | N1 |
| Take Out | shorthand for removing Security holders of the Target Company. For example, when a PE Sponsor acquires a Target Company, it Takes Out the public shareholders. Take Out should not be confused with the junk food you eat every night for weeks on end in a conference room when you negotiate a M&A transaction. | N1 |
| Take Private | often used interchangeably with Going Private. More technically, Take Private is the process by which a third party Buyer obtains ownership of 100 percent of a previously Public Company. 1. (UK) see Public to Private | N1 |
| Take-along Agreement | Tag-along Right. | N2 |
| takeover | Corporate action where one company makes a bid to acquire another. If the target company is publicly traded, the acquiring company will make an offer for the outstanding shares. | N6 |
| Takeover | the transfer of control of a company. | N5 |
| Takeover | This is similar to acquisition. Takeover differs with merger in approach to business combinations ie, the process of takeover, transaction involved, determination of share exchange. for ex: process of takeover is unilateral and the offeror company decides about the maximum price. Time taken in completion of the takeover is less than that in the merger. | N3 |
| Takeover | Acquisition of another company. | N2 |
| Takeover | another name for an Acquisition, often used to refer to the acquisition of a controlling stake in a Public Company | N1 |
| Takeover bid | It is the intention of the acquirer reflected in the action of acquiring the shares of the Target company. | N3 |
| Takeover Code | 1. (US) see the Securities Exchange Act 2. (UK) see UK Takeover Code 3. (DEU) see German Takeover Code 4. (ESP) Royal Decree 1066/2007, of 27 July, on public Takeover Bids regulation 5. (FRA) provisions may be found in the French Commercial Code and/or the AMF’s General Regulation, depending on the contemplated Acquisition 6. (HKG) see HK Takeovers Code 7. (ITA) the provisions governing Takeovers are set forth in the Consolidated Financial Act and its implementing regulations issued by Consob 8. (RUS) no equivalent code exists under Russian law; M&A transactions are regulated by the Russian Civil Code and the Federal Law on the Protection of Competition 9. (SGP) see Singapore Takeover Code | N1 |
| Takeover Defense(s) | a name for any substantive provision or structural device that deters, makes more difficult or precludes a Hostile Bid. See also Shark Repellent and Poison Pill. | N1 |
| Takeover Panel | 1. (US) see SEC 2. (UK) see UK Takeover Panel 3. (HKG) see HK Takeovers Panel 4. (ITA) see Consob 5. (RUS) in Russia, two federal services regulate M&A transactions, the Federal Antimonopoly Service and the Federal Financial Markets Service (FSFR, FSFM or FCSM) 6. (SGP) see Securities Industry Council 7. (UAE) see SCA | N1 |
| TALF | See term asset-backed securities loan facility. | N6 |
| Tangible Asset | an asset that has physical form and derives value from its physical properties or tangible nature (e.g., real estate, property, plant, equipment). Contrast with Intangible Asset | N7 |
| Tangible Assets | Fixed Assets. | N2 |
| Target | A company or asset to be acquired. | N5 |
| Target | Company whose shares ( Share Deal) or business operations ( Asset Deal) are to be acquired and transferred (in whole or in part) in the course of a transaction. | N2 |
| Target | see Target Company | N1 |
| Target Company | commonly used name for the company or business purchased in a transaction in which the economic buying and selling entities are discernible (as compared to a Merger of Equals where, at least in theory, there are no economic buying and selling entities). Also used to identify the subject company of a Tender Offer or Exchange Offer, without regard to whether there is a consensual Merger Agreement governing the Tender Offer or Exchange Offer and without regard to whether the Tender Offer or Exchange Offer is successfully consummated. | N1 |
| Target company or acquiror | The company which is being merged or taken over by the other company. | N3 |
| target firm | Firm that has been targeted by another firm for a takeover. | N6 |
| Target Group | Group of companies to be acquired in the course of a transaction (see also Target). | N2 |
| Target MAC | a Business MAC focused specifically on the Target Company | N1 |
| Target Working Capital | the state of the working capital to be used as a basis for settlement at the time of the closing. The target working capital is recorded in a contract during the negotiations and is often based on a historical analysis of the working capital requirements of the business. The settlement is based on the closing accounts, with the price being increased or reduced if the company has more or less working capital than the target capital on the date of the closing accounts | N4 |
| TARP | See Troubled Asset Relief Program. | N6 |
| Tax Amortization Benefit | the present value of income tax savings resulting from the tax deduction generated by the amortization of an Intangible Asset | N7 |
| Tax Consolidation | a tax regime available in a number of countries which a group of wholly-owned or majority-owned companies located in the same jurisdiction can opt for, so that the group is treated as a single entity for income tax purposes | N1 |
| Tax Covenant | provisions contained in the SPA or in a standalone Tax Deed in Share sales to govern the responsibilities of the Seller and the Buyer in relation to certain existing and future tax liabilities of the Target Company | N1 |
| Tax Deed | see Tax Covenant | N1 |
| Tax Depreciation Benefit | the present value of income tax savings resulting from the tax deduction generated by the depreciation of a Tangible Asset | N7 |
| Tax due diligence | the investigation of the historical and future tax situation of the company. Usually undertaken by the purchaser’s accountants or advisers. | N5 |
| Tax due diligence | the investigation of the historical and future tax situation and exposure of the company or companies in the areas of both direct and indirect taxes | N4 |
| Tax Due Diligence | Examination of a company’s tax situation during Due Diligence. | N2 |
| Tax Gross Up | a Gross Up with respect to specified tax obligations | N1 |
| Tax Haven | Territory with low tax rates. | N2 |
| Tax Indemnity | Agreement under which one party agrees to pay another party the amount of any taxes incurred in connection with a transaction or otherwise economically attributable to one or the other party. | N2 |
| Tax Indemnity | an Indemnity stemming from or related to a Tax Covenant or Tax Deed | N1 |
| Tax Sharing Agreement | together with tax warranties, a Tax Covenant protects the Buyer in a Share sale against the risk of the Target’s pre- Completion tax liabilities that may not have been revealed by Due Diligence and which were not recognized in the accounts. A Tax Sharing Agreement provides a means of adjusting the price to reflect any such liabilities. A Tax Covenant can be included in the SPA itself or in a standalone Tax Deed. | N1 |
| Tax treatment | usually, the sale of shares (a share deal/share transfer) are subject to Entrepreneurs Relief or other taxes. Therefore it is usually preferred by the seller. Conversely, the buyer may prefer an asset deal because the goodwill paid may be subject to preferred tax-treatment and comes free of liabilities from the previous company structure, in effect a clean slate. | N5 |
| Tax treatment | usually, gains on shares are not taxable and the sale of shares (a share deal) may be preferred by the seller. On the other hand, the buyer may prefer an asset deal for tax purposes because the goodwill paid ( see chapter on Valuation – Goodwill) may be tax-deductible, which, in principle, is not the case with a share deal | N4 |
| Tax-Free Reorg | one of a number of transactions (e.g., B Reorg, C Reorg) described in Section 368 of the US Internal Revenue Code in which corporations and their shareholders may transfer or receive Stock or other property free of tax. To qualify for Tax-Free Reorganization treatment, a transaction generally must have a Bona Fide business purpose, provide that the Target corporation’s owners direct or indirect ownership interest in the acquiring corporation, and provide that the Target corporation’s assets continue to be used in a business. Note that Tax-Free Reorganizations involving insolvent Target corporations, other than certain Bankruptcy Restructurings, may face difficulties in qualifying for tax-free treatment under proposed regulations. | N1 |
| T-bill/T-bond | See treasury bill, treasury bond. | N6 |
| Teaming | another name for joint bidding. See also Bidder Group. | N1 |
| Teaser | A short description of the target company, made available to the investment community. Its aim is to see if there is appetite in the market for the company, without disclosing its identity. | N3 |
| Teaser | Brief anonymous description of the Target sent to potential buyers; if the recipients of the teaser express an interest in the transaction, they are put on the Short List. | N2 |
| Teaser | short (often anonymous) description of a company which shall be sold in an Auction. Investment Banks send out Teasers to potential Investors. A Teaser usually offers limited information about the Target, as the intention is to generate interest from potential Bidders who then receive an Information Memorandum. If the potential Purchasers indicate interest in the company they then receive detailed information after signing a Confidentiality Agreement. | N1 |
| Teaser / blind profile / executive summary | the anonymous profile of the company that is sent to potential buyers. The aim is to determine whether such a purchase could interest them without the identity of the company being disclosed. | N5 |
| Teaser/blind profile | the anonymous profile of the company that is sent to potential buyers. The aim is to determine whether such a purchase could interest them without the identity of the company being disclosed. | N4 |
| technical analysis | Attempt to predict share price movements on the basis of past patterns. (See also chartism.) | N6 |
| TECOM | a grouping of Free Zones in Dubai focusing on media, technology, IT, knowledge and education, and outsourcing | N1 |
| tender | Method of issuing securities whereby investors are invited to bid, subject to a minimum price. The allocation of the securities is made according to the prices bid. | N6 |
| Tender Agreement | a Target Company’s stockholder’s agreement to tender or exchange their Securities in a Tender Offer or Exchange Offer | N1 |
| Tender offer | The acquirer pursues takeover (without consent of the acquiree) by making a tender offer directly to shareholders of the target company to sell their shares. This offer is often made for cash. | N3 |
| Tender Offer | a Unilateral Offer by a Buyer to purchase a Target Company’s Securities directly from the owners of those Securities, usually for all cash. If the Buyer is offering to purchase Securities of the Target for consideration other than all cash, the transaction is more commonly called an Exchange Offer. However, the term Tender Offer is sometimes used generically to describe any Unilateral Offer to purchase another entity’s Securities, without regard to the type of consideration offered. A Tender Offer or Exchange Offer, unlike a Merger Agreement, does not need the assent of the Target Company, which is not a party to the transaction. Accordingly, Hostile Takeovers are commonly structured as Tender Offers or Exchange Offers. However, Friendly transactions can and often are structured as a Tender Offer or Exchange Offer, either exclusively or as a first step in a Two-Step Acquisition. See also Exchange Offer. 1. (UK) Tender Offers must be undertaken in accordance with Appendix 5 of the City Code | N1 |
| tenor | Length of a swap contract. | N6 |
| TER | See total expense ratio. | N6 |
| term (of a bond) | Period remaining until the final payment. | N6 |
| term asset-backed securities loan facility (TALF) | Second economic measure implemented by the Federal Reserve in the United States, in which US$800 billion was issued to Congress to remove toxic securities from US banks’ balance sheets during the 2008 credit crunch. (See also Troubled Asset Relief Programme.) | N6 |
| term deposit | Bank deposit for a fixed period of time. The interest rate may be fixed at outset, or variable. | N6 |
| Term Loan | loan for a specific amount that the Borrower borrows on day one and then pays back according to a predetermined schedule | N1 |
| Term Sheet | Summary of the key points of the agreement between the parties. The points included in the term sheet are subsequently incorporated into the contract. Term sheets can be binding or non-binding in whole or in part. | N2 |
| Term Sheet | summary of a transaction’s principal terms. Term Sheets are very common in financing transactions and are an almost universal part of a Commitment Letter. Term Sheets are also very common for proposed Acquisitions of non-public Target Companies, transactions which do not require public disclosure of the negotiations. However, Term Sheets are very uncommon in Public Company Acquisitions because of concerns about required disclosure before the transaction is ripe for public disclosure. Term Sheets are rarely intended to be binding and ordinarily should contain a specific provision to that effect. There are instances, however, in which a party has tried, sometimes successfully, to enforce a Term Sheet in court. | N1 |
| term structure of interest rates | Yield curve displaying the relationship between spot rates of zero coupon securities and their term to maturity. | N6 |
| Terminal Value | residual value for an enterprise in a DCF analysis for years beyond the end date of projections utilized to compute Discounted Cash Flows based on those projections | N1 |
| Terminal Value | an estimate of the value of Economic Income of a business beyond the discrete forecast period in the Discounted Economic Income Method. Also known as residual value or continuing value | N7 |
| Termination Date | general term for the date on which a party or parties is no longer obligated to perform under a contract. Almost all Acquisition Agreements contain a Termination Date. | N1 |
| Termination Fee | amount payable under an Acquisition Agreement by the Seller to the Buyer as compensation for Seller’s exercise of a Fiduciary Out provision if the consequence of the exercise is a termination of the Acquisition Agreement by either party. The typical range for a Termination Fee is one to four percent of the Equity Value of the transaction with fees in larger deals often in the two to three percent range. See also Break-Up Fee. 1. (UK) such fees are only available in relation to Private Company Acquisitions | N1 |
| Termination Fee Tail | period of time following termination of an Acquisition Agreement during which specified events (such as a sale to a Competing Bidder) will Trigger payment of a Termination Fee | N1 |
| Termination Fee Triggers | acts or events that give a Buyer under an Acquisition Agreement the right to be paid a Termination Fee | N1 |
| Termination Provisions | rights under an Acquisition Agreement for a party unilaterally to terminate the agreement contingent upon certain prescribed events. Public Company Merger Agreements almost always have Termination Provisions in favor of the Buyer if the Target Company exercises its Fiduciary Out. See also Outside Date and End Date. | N1 |
| Texas Shoot Out | A type of dispute resolution mechanism used in a Joint Venture; closely related to Russian Roulette. A Texas Shoot Out likewise results in termination of the joint venture. | N2 |
| Texas Shoot-Out Clause | solution to a deadlock. A Texas Shoot-Out involves each party sending a sealed all cash Bid to an umpire stating the price at which they are willing to buy out the other party. The sealed Bids are opened together, and the highest sealed Bid “wins,” and that Bidder must then buy (and the “loser” must sell) the other half Share in the business. | N1 |
| The Civil Code Qatar | refers to Law No. (22) of 2004 – the Civil Code of Qatar | N1 |
| The Companies Law Qatar | refers to Law No. (27) of 2006 (as amended) | N1 |
| The Constitution of Qatar | also known as the Permanent Constitution of the State of Qatar. The latest version to be adopted was on 29 April 2003 and sets out the constitutional and legal framework of Qatar | N1 |
| The Takeovers Law Qatar | refers to Law No. (3) of 2010 amending the CCL | N1 |
| Thin Capitalization | a company is thinly capitalized when its capital is made up of a much greater proportion of debt than equity, meaning its Gearing is too high. Many European tax regimes have rules to ensure that companies have a fair proportion of equity capital so they cannot minimize taxable profits in this way. These rules typically work by restricting tax deductions in respect of the “excess” debt capital. | N1 |
| thin market | Market with few bid and ask offers. The market is characterised by low liquidity, high spreads, and high volatility. Also known as a narrow market. | N6 |
| Third Party Rights | the ability to allow non-signatories to a document to enjoy the benefit of its terms in ways which differ according to the jurisdiction 1. (UK) enacted in the UK through the Contracts (Rights of Third Parties) Act 1999 2. (SGP) enacted in Singapore through the Contracts (Rights of Third Parties) Act (Cap. 53B) | N1 |
| Threat | term of art under the Unocal/Unitrin Doctrine referring to a judicially cognizable harm or detriment to a company or its shareholders. Examples include allowing a Buyer to acquire control of a company without paying any, some, or all of its shareholders an appropriate control premium, or a Buyer paying different amounts of consideration to similarly situated shareholders. | N1 |
| Threshold | regularly, parties agree only to submit claims if the total amount of the claims exceeds a specified minimum amount | N5 |
| Threshold | frequently, parties agree only to submit claims if the total amount of the claims exceeds a specific minimum amount (Threshold). Two systems can then be linked to this, specifically the basket and the threshold sum. Of course, hybrid systems may also be agreed on | N4 |
| Threshold | A ‘threshold in a Sales and Purchase Agreement context refers to the total value that claims in the claims basket need to reach before a compensation mechanism, or legal mechanism is triggered. | N3 |
| Threshold | Limit which has specific consequences when reached or exceeded (see also Materiality Threshold). | N2 |
| Threshold | often used as another word for Trigger | N1 |
| Ticking Fees | in an Acquisition Agreement context, Ticking Fee means a periodic extra payment by the Buyer to the Target Company’s shareholders if certain events have not occurred within a specified time period. A common use of a Ticking Fee is a provision under which the Buyer will increase the consideration payable per Share by a specified additional monthly amount for each month after a Trigger date, until antitrust clearance is obtained. In the M&A financing context, Ticking Fee means a fee associated with a long-term commitment to provide a Bridge Loan or other Credit Facility, which starts accruing the day the Fee Letter is signed (or a specified number of days thereafter) and terminates when the underlying transaction is either consummated or terminated. | N1 |
| TIDES | acronym for three-year Independent Director evaluation (TIDE) and another name for Sunset Provisions in a Poison Pill | N1 |
| tier 1 capital | Describes the capital adequacy of a bank. Tier 1 capital is core capital that includes equity capital and disclosed reserves. | N6 |
| tier 2 capital | Describes the capital adequacy of a bank. Tier 2 capital is secondary bank capital that includes items such as undisclosed reserves, general loss reserves and subordinated term debt. | N6 |
| tiger economy | Nickname given to the economies of Southeast Asia encompassing markets such as Indonesia, Singapore, Malaysia, Thailand, South Korea and China. | N6 |
| tilt | Adoption of a particular view on a sector by overweighting or underweighting that sector relative to the portfolio benchmark (e.g. a portfolio which was overweight resource shares and underweight industrials would be described as having a tilt towards resources and away from industrials). | N6 |
| Time and expense based fee | fee-based on hours worked and reimbursement of expenses incurred | N5 |
| Time and expense based fee | fee based on hours worked and reimbursement of expenses incurred | N4 |
| time value (of an option) | Part of a traded option’s value that can be attributed to the possibility of future market movements adding to the value of the option. It is reflected by the difference between the traded price of the option and the intrinsic value of the option. (See also intrinsic value.) | N6 |
| time-weighted rate of return | Rate of return on an asset or portfolio that adjusts for the effect of cash flows. The time-weighted return can be used to compare portfolio performances against each other and against market indices. (See also money-weighted rate of return.) | N6 |
| Tipping Basket | a term used to describe the minimum liability Threshold which must be reached for a party to become liable, and when reached the Basket is said to “tip.” For example, a Share Purchase Agreement may specify that Party A will not be liable for claims which individually are less than $10 in value and in aggregate are less than $100. This means only claims of $10 or more will make it into the Basket and Party A will not be liable for any of those claims until the Basket contains claims which add up to $100, at which point the Basket tips and Party A is liable for $100. | N1 |
| TIPS | See Treasury Inflation Protection Securities. | N6 |
| Tire-kickers | Buyers that are either too timid to make an acquisition or just being nosey | N5 |
| Title | Right of ownership (see Chain of Title). | N2 |
| Title Reference | Details of the parties involved at the start of a document or judgment. | N2 |
| Tokyo Stock Price Index (TOPIX) | Index measuring the share prices of selected companies listed on the Tokyo Stock Exchange. | N6 |
| Tombstone | following the completion of the transaction, advisors or financiers often have a Perspex trophy or, literally, a «tombstone» made to commemorate the transaction. This tombstone is presented as a memento to the deal teams and other advisors | N4 |
| Tombstone | After the transaction, a tombstone is produced for marketing purposes. As evidence of transaction experience, the tombstone will be displayed in future credentials and pitches. | N3 |
| Tombstone | “Trophy” distributed to those involved in a transaction as a memento after completion, often by the investment bank or M&A advisor. | N2 |
| Tombstone | 1. a name for an ad published to notify the world at large that an event — of actual or presumed importance to the financial services industry — has occurred. See Summary Ad. 2. another name for a Deal Toy | N1 |
| top quartile | Quartile ranking that is in the top 25% of returns. (See also bottom quartile.) | N6 |
| top-down | Approach to investment analysis which starts from macroeconomic factors (GDP growth, interest rates, inflation, etc.) and business cycle analysis to identify a portfolio distribution across asset classes, then a country/currency mix, a sector distribution and ultimately a stock selection. It is the converse of the bottom-up approach. (See also bottom-up.) | N6 |
| TOPIX | See Tokyo Stock Price Index. | N6 |
| Topping Bid | a Competing Bid that is better than the current Bid | N1 |
| Topping Fee | a fee payable to a presumed winning Buyer if the Target Company receives a Topping Bid. See also Termination Fee, which, in practice, is often a Topping Fee. | N1 |
| Topping Right | a contractual right to submit a Topping Bid | N1 |
| Top-Up Option | in a Tender Offer or Exchange Offer context, Top-Up Option means an Option granted by the Target Company to the Buyer to purchase up to all of the Target Company’s authorized but unissued common Shares, exercisable only if the Buyer has received tenders for sufficient Shares to permit it unilaterally to approve a Back-End Merger under both state law and the company’s Charter. The Exercise Price of a Top-Up Option is almost always the Tender Offer or Exchange Offer price and is customarily payable by an unsecured Buyer’s Note, as well as in cash. Top-Up Options only make sense if the Target has enough authorized but unissued common Shares to permit the Buyer to reach the ownership level required for a Short Form Merger. To avoid any state law issues regarding whether the issuance of Shares under a Top-Up Option adversely affects Appraisal Rights because the Top-Up Option is or could be Dilutive to the intrinsic value of Dissenters’ common Shares, the Top- Up Option contract provision should explicitly provide that any Shares issued under the Top-Up Option are to be disregarded for purposes of Appraisal Rights. | N1 |
| Top-Up Placing | a company’s placing of Shares facilitated by a company’s substantial or Controlling Shareholder whereby already listed Shares of the existing shareholder(s) are first sold to investors and then the selling shareholder subscribes for the same number of new Shares from the company (subject to obtaining Listing Approval for the new Shares) at the same price, less the expenses incurred in the placing | N1 |
| Toronto Stock Exchange (TSX) | Largest stock exchange in Canada, historically home to a large number of natural resource companies. | N6 |
| total expense ratio | Total costs experienced by investors in an investment fund, divided by the total asset value of the fund. The total costs include management fees (asset-based or performance-related), transactions costs, broking fees and auditor fees, among others. | N6 |
| total rate of return swap (TRORS) | Contract in which one party receives interest and/or dividend payments plus any capital gains and losses over the payment period on a reference asset (or index, or portfolio of assets), while the other receives a specified fixed or floating cash flow unrelated to the credit-worthiness of the reference asset. (Payments are usually based on the same notional amount.) | N6 |
| total return | Overall return on a stock or portfolio taking into account changes in capital values and income earned. | N6 |
| Total Return Swaps | a type of Swap under which the so-called “long party” receives from its counterparty (typically a Swaps dealer and frequently called the “short party”) any economic appreciation in value of a specified “notional” number of common Shares of a company. The long party in return, promises to pay the short party any economic Depreciation in value of the notional number of Shares. The key terms of a Total Return Swap, accordingly, include the notional number of Shares covered, the starting date of the Swap and the ending date. A Total Return Swap gives the long party the economic equivalent of outright ownership of the notional number of Shares, but not voting rights. 1. (US) Total Return Swaps are used for a large number of investment strategies, but are controversial in the M&A context because they do not ordinarily require reporting as beneficial ownership and thus, standing alone, do not Trigger any reporting obligations under Section 13(d) of the Securities Exchange Act 2. (UK) such Option arrangements require disclosure in a UK Takeover, as they constitute Interests in Shares | N1 |
| toxic asset | Asset for which for which the secondary market has disappeared, on the basis that the asset is expected to incur significant future losses. Investors holding toxic assets may be forced to sell these at large discounts to book value, in order to raise liquidity and stabilise their balance sheets. | N6 |
| Track Record | List of transactions, business deals or instructions handled which documents the experience of an advisor in relation to a particular activity, sector or area of expertise. | N2 |
| tracking error | Measure of the variability of investment returns relative to a benchmark or index. It is usually expressed as the annualised standard deviation of relative returns. Can be expressed as either ex-post, which is simply the historical tracking error, or ex-ante, which is a forward-looking estimate of the future tracking error. (See also ex-post, ex-ante.) | N6 |
| Trade License | see Charter | N1 |
| Trade multipliers | Acquirers can compare the relative values of the Target’s peer companies publicly listed. Examples of multipliers: – Enterprise Value/Income – Enterprise Value/ EBITDA – Enterprise Value/ EBIT – Enterprise Value/ free cash flow – P/E (price to earnings ratio) | N3 |
| Trade Sale | Private sale of shares in a company to a a single buyer, i.e. not via the stock market (e.g. by means of an IPO). | N2 |
| Trade Sale | sale of a company to another company/Strategic Acquirer | N1 |
| Trading Blackout | a Trading Blackout prohibits a company’s Insiders from trading in the company’s Securities while the blackout is in effect. Also referred to as a Blackout Period or “Closed Period.” | N1 |
| tranche | Packages created when a bond’s cash flows are repackaged as a collateralised debt obligation (CDO) or a portfolio of securities is repackaged as a collateralised mortgage obligation (CMO). Each tranche has a different risk/return profile, and the tranches trade separately from one another. | N6 |
| transaction costs | Costs incurred when buying or selling securities. These include brokers’ commissions and spreads (the difference between the price the dealer paid for a security and the price he or she can sell it for), market impact (security price movements brought about by trading activity) and opportunity costs. | N6 |
| Transaction Fees | a general name for fees payable to advisers (such as legal and financial) in connection with a M&A transaction | N1 |
| Transfer Agent | a bank or trust company hired by a Public Company to keep the official company records of the holders of record of its Stock. A company’s Transfer Agent is responsible for issuing and transferring these ownership interests. The Transfer Agent function is not nearly as important as it used to be, because the vast majority of Public Companies’ outstanding Shares are immobilized in and owned of record by Depositories, like DTC. Some Investors, particularly small Investors, still like to receive paper certificates as evidence of their Stock ownership. | N1 |
| Transfer of a Going Concern (TOGC) | Where a business is transferred as a going concern and thus taken out of the scope of VAT | N5 |
| Transfer of Undertakings (Protection of Employment) | TUPE, (pronounced almost the same way as the gentlemen’s hair piece), which, on a sale of a business or a service provision change, transfers the transferor’s employees assigned to the undertaking (or part of the undertaking) to the transferee 1. (UK) provided under the Transfer of Undertakings (Protection of Employment) Regulations 2006 2. (DEU) provided in section 613a of the German Civil Code (Bürgerliches Gesetzbuch) | N1 |
| Transfer Scheme | a Scheme of Arrangement used to effect a P2P public Takeover by the transfer of all existing Shares to the Bidco | N1 |
| Transition Agreement | another name for an Interim Services Agreement | N1 |
| transition manager | Manager whose specific role is to transition one portfolio of assets to another whilst minimising direct and indirect costs. | N6 |
| Transition Service Agreement (TSA) | A transition services agreement or a tsa is a common contract sign between the seller and the buyer, covering post-deal support services to the target business to continue operating as it currently does. Until such times as it can be set up independently or integrated fully into the acquirer. It’s signed along with the sales a purchase agreement and is normally defined along the level of services and can be exited between 6 and 18 months later. | N3 |
| Transition Services | services a Seller of a division or subsidiary provides to a Buyer with respect to the business the Buyer has purchased from the Seller | N1 |
| Transition Services Agreement | another name for an Interim Services Agreement | N1 |
| Transitional Services Agreement (TSA) | Agreement between the companies involved in a transaction stipulating that existing services provided within the seller´s corporate group will continue to be provided to the Target for a transitional period following completion of the transaction. | N2 |
| Transmission Universelle du Patrimoine | see TUP | N1 |
| treasury bill | Bond issued by a government with a maturity of one year or less. Also called a T-bill in the US. | N6 |
| treasury bond | Bond issued by a government — for example, US treasuries. | N6 |
| Treasury Inflation-Protected Securities (TIPS) | Index-linked (i.e. inflation-linked) bonds issued by the US government. | N6 |
| Treasury Shares | see Treasury Stock | N1 |
| Treasury Stock | issued and outstanding Shares that are purchased by the Issuer and not returned to the status of authorized but unissued Shares by means of a Charter amendment. Treasury Stock thus remains issued but not outstanding (i.e., held by third parties). 1. (SGP) under the Companies Act of Singapore, “Treasury Shares” are Ordinary Shares or Stocks which have been purchased or otherwise acquired by a company in accordance with sections 76B to 76G of the Companies Act of Singapore and which the company has held continuously since such purchase or Acquisition | N1 |
| Trees (Running Trees) | in the Acquisition context, Trees are references to different Bidders or Financing Sources. If a company puts itself up for sale (in an Auction), usually multiple Bidders will look at the Target Company, and each Bidder will in turn examine possible financing from a variety of banks. So if Sponsor A and Sponsor B were looking at the Target Company, and each had two possible Financing Sources (drafting Commitment Papers), there would be two Acquisition Trees and four financing Trees. | N1 |
| trend analysis | Type of technical analysis used to determine or locate significant trends in a security. | N6 |
| Triangular Merger | a Merger in which the Target Company and a subsidiary of the Buyer are merged, with the result that the Buyer becomes the owner (usually of all the equity) of the resulting merged entity. Triangular Mergers are by far the most common Merger structure because they do not impact any of the Buyer’s legal, corporate and tax attributes. See also Forward Triangular Merger and Reverse Triangular Merger. | N1 |
| Trigger | a generic term for an event or condition that results in certain actions or consequences (e.g., Pill Trigger) | N1 |
| Triggering Event | An event which has specific legal consequences. | N2 |
| triple bottom line | Holistic approach to measuring a company’s performance on environmental, social and economic issues. The triple bottom line focuses companies not just on the economic value they add but also on the environmental and social value they add or destroy. | N6 |
| Troubled Asset Relief Program (TARP) | Initial economic measure implemented by the Federal Reserve in the United States in which US$700 million was issued to Congress to remove toxic mortgagebacked securities from US banks’ balance sheets during the 2008 credit crunch. (See also term asset-backed securities loan facility.) | N6 |
| True and Fair View | Principle according to which financial statements must present a true and fair view of the entity’s assets, liabilities, financial position and profit or loss (see also section 264 (2) of the German Commercial Code (HGB)). | N2 |
| True Sale | A “genuine” sale of receivables (see also Asset Backed Securities; Factoring) which is not re-characterised as a loan for legal purposes; i.e. a transaction that can be classified both commercially and legally as a purchase. | N2 |
| trust deed | Most UK pension schemes are formally established as trusts, and the trust deed is the governing document specific to each scheme. The trust deed will set out the trustees’ investment powers and any specific restrictions on permitted investments, etc. | N6 |
| trustee | Individual or organisation responsible for the management and administration of a trust, for example, a pension plan, on behalf of the beneficiaries of that trust. | N6 |
| TSA | Transitional Services Agreement. | N2 |
| TUP | acronym for Transmission Universelle De Patrimoine, dissolution of a company without any Liquidation process. Decided by the sole shareholder of the company to be dissolved, to which all assets and liabilities will be automatically transferred. | N1 |
| TUPE | Transfer of Undertakings (Protection of Employment). Protection of employment law often involves that employee seniority, pay level, acquired benefits transfer to the new owner. In the case of carve-outs, there are legal requirements related to confidentiality and consultation of employees who transfer to the Target. ‘TUPE’ is the umbrella term to describe all these liabilities, requirements and obligations. | N3 |
| TUPE | acronym for Transfer of Undertakings (Protection of Employment) | N1 |
| TUPE / Transfer of Undertakings (Protection of Employment) | according to European and UK employment law, in many cases, there is a mandatory transfer of employment contracts. This is a specialised area which needs careful consideration and advice | N5 |
| TUPE: Transfer of Undertakings (Protection of Employment) | according to European and Belgian social law, in many cases there is a mandatory transfer of employment contracts, even if there is no legal continuity for the company itself. Reference to this situation is made in a European context in TUPE, and in Belgium in CAO 32bis (section 32b of a collective bargaining agreement). | N4 |
| turnaround | Situation where a company that has had poor performance for an extended period of time experiences a reversal of fortune. | N6 |
| Turnaround | the process of re-energising a business or company with the aim of a substantial increase in a company’s revenues, profits and reputation | N5 |
| Turn-Around | changing a distressed business, in order to preserve it as a going concern. Such changes can include reducing liabilities through cost cutting measures, procuring new investment and debt Restructuring | N1 |
| Turn-around funds | see also vulture fund or special situations fund. This places emphasis on the value created by restructuring the acquired companies and making them profitable again (i.e. turning them around) | N5 |
| turn around funds | see also vulture fund or special situations fund. This name places the emphasis on the value created by restructuring the acquired companies and making them profitable again (i.e. turning them around) | N4 |
| turnover | Measure of the level of trading in a market or portfolio. Usually expressed as the sum of the total value of purchases and sales in a period as a percentage of the portfolio value. | N6 |
| two and twenty | Fee structure usually employed by hedge fund and some private equity managers, with a base fee of 2% of the fund’s asset value plus a fee of 20% of the outperformance of the fund. | N6 |
| Two Step Acquisition | an Acquisition of 100 percent of a Target Company’s Common Stock pursuant to a Tender Offer or Exchange Offer (the Front- End Transaction or First Step Acquisition), followed by a Back-End Merger or Second Step Merger. In many, but not all cases, the Back-End Merger is pursuant to an Acquisition Agreement that requires the Buyer to initiate the Acquisition through a Tender Offer or Exchange Offer for a majority or all of the Target Company’s voting equity Securities. The consideration payable in the Back-End Merger may be the same as in the Front-End Transaction or it may differ. For example, the Front-End Transaction might provide only cash consideration through a Tender Offer, and the Back-End Merger might use only the Buyer’s Common Stock as consideration. | N1 |
| Two Step Merger | same as a Two Step Acquisition | N1 |
| Two Tier Reverse Termination Fee | see Bifurcated Reverse Termination Fee | N1 |
| Two Tiered Offer | a Two Step Acquisition in which the consideration for the Front-End Transaction differs from the consideration for the Back- End Merger. In many cases, the Front-End Transaction consideration will have a higher value than the Back-End Merger consideration. | N1 |
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.