Glossary
Plain-English definitions of terms that come up regularly in Daily BidCo issues. This is general education, not legal advice — always check the primary source (the deal's own announcements) for how a term applies in a specific case.
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A mandatory report that U.S. publicly traded companies file with the Securities and Exchange Commission (SEC) to announce major, unscheduled corporate events that shareholders need to know about
Absolute priority
The principle that creditors must be paid before shareholders receive anything
Acquisition financing
Loans raised specifically to pay for a purchase
Add on acquisition
A company already owned by a PE fund buys another business, and the fund supplies the money
ADIA
The Abu Dhabi Investment Authority
adjusted EBITDA
Operating profit before interest, tax, depreciation and certain one off items
Agreed plan of reorganisation
The court approved document that sets out what each class of creditor and shareholder gets
Agreement and Plan of Merger
The main contract in a US public company acquisition, setting out the price, the conditions and when either side can walk away
Appraisal rights
A Delaware law right to ask a court to value your shares instead of taking the deal price
Assumed debt
The borrowings the buyer takes over
BaFin
Germany's financial regulator
BidCo
A company set up purely to make and hold the acquisition
bookrunners and mandated lead arrangers
The banks that underwrite the loan and then sell parts of it on to other lenders
Break fee
A payment to compensate a jilted buyer
Break fee (inducement fee)
A payment a target agrees to make to a bidder if the deal falls through in certain circumstances — for example, if the target's board recommends a rival bid instead. Meant to compensate the original bidder for its costs and discourage the target walking away.
Business Combination Agreement
The main contract between a bidder and a listed target, setting out how the offer will run, what the board will recommend and what the buyer promises about the company's future
Carve out
The sale of selected businesses out of a larger group
Cash confirmation (Rule 2.7(d))
A statement in a firm takeover announcement, given by the bidder's financial adviser, confirming that the bidder has the cash resources available to complete the offer. Required under Rule 2.7(d) of the UK Takeover Code so shareholders aren't asked to accept an offer that can't actually be paid.
Competition and Markets Authority
The CMA, the UK competition regulator
Competitive tender
A structured auction in which bidders submit binding offers that the seller scores against published criteria
Concert party
A group of people or entities who cooperate to acquire or exercise control over a company, and whose shareholdings are treated as combined for the purposes of takeover rules — even if no single member holds a large stake individually.
Conditions precedent
Things that must happen before completion, such as regulatory clearances
Convertible notes
Bonds that holders can swap for shares
Debt commitment letter
A binding promise by banks to lend
Decree Law 92/2025
A law made by the Government rather than Parliament, here under Portugal's Law on Privatisations
Definitive agreement
The binding contract that commits both sides to the deal, subject to agreed conditions
Delaware General Corporation Law
The company law of Delaware, where both Braze and Salesforce are incorporated
Dilute (shares)
Where each existing share becomes a smaller slice of the company
DIP financing
Debtor in possession financing: a loan to a company while it is in Chapter 11, which the court normally lets rank ahead of existing debt
Due diligence
The investigation a buyer carries out into a target company's finances, contracts, legal position, and operations before completing a deal — to confirm what they're actually buying and surface any risks.
EBITDA
Earnings before interest, tax, depreciation and amortisation, a rough measure of operating cash profit
Enterprise value
The price for the whole business, meaning the equity plus the debt the buyer takes on
Equity and debt financing
Money that investors and banks have contractually promised, rather than merely offered to try to raise
Equity commitment letter
A legally binding promise by an investor to provide a set amount of equity funding when the deal completes
Equity rollover
A deal structure in M&A (mergers and acquisitions) where the seller of a business reinvests a portion of their sale proceeds into the acquiring company's post-transaction equity instead of receiving 100% of the payment in cash at closing
Escrow account
Money held by a neutral third party
Extraordinary general meeting
EGM, a shareholder meeting called outside the usual annual cycle
Fiduciary out
A clause letting the board change its recommendation or terminate for a superior proposal
Firm offer (Rule 2.7 announcement)
The point at which a possible bidder commits to making a formal offer, under Rule 2.7 of the Takeover Code. Before this, a bidder can still walk away; after it, they're bound to proceed on the announced terms (subject to any conditions).
forward EBITDA
Expected earnings before interest, tax, depreciation and amortisation over the coming year, a common shorthand for a business's operating profit
Free cash flow
The cash a business generates after paying for its running costs and investment
Fully committed financing
A binding promise to lend at closing, so the deal does not depend on raising money later
Hart Scott Rodino
U.S. federal law requiring companies planning specific mergers and acquisitions to submit pre-merger notification filings to the Federal Trade Commission (FTC) and the Department of Justice (DOJ) Antitrust Division before closing the deal
Hart Scott Rodino Act
The US merger notification regime
HSR waiting period
The US antitrust pre merger waiting period under the Hart Scott Rodino Act
Impairment
A write down in the value of assets on its balance sheet
Independent balance sheet
A financial snapshot that shows what a single entity or person owns and owes at a specific point in time
Independent expert
A valuation firm appointed to give shareholders an opinion on whether the deal is in their best interests
Irrevocable undertaking
A binding promise from a shareholder (often a director or major investor) to accept a takeover offer when it's made. Bidders often secure these before announcing a bid, to show they already have support lined up.
Irrevocable undertakings
Binding promises by major shareholders to support a bid
Joint venture
A business owned by two or more investors who agree, in a shareholders' or LLC agreement, how it will be governed
Leveraged buyout
An acquisition paid for largely with borrowed money. The debt is usually secured against the target’s own assets and cash flows and repaid from them, so the buyer puts in less of its own equity.
Leveraged buyout (LBO)
An acquisition largely funded with borrowed money, using the target company's own assets or cash flow as security for the debt. Common in private equity deals, where the buyer puts in relatively little of its own cash upfront.
Material adverse effect
A serious, lasting deterioration in the business
Merger
A statutory process under which two companies combine and one disappears
Merger agreement
A contract under which one company is absorbed into another, binding all shareholders once the required vote passes
merger arbitrage spread
The discount at which a target's shares trade below the agreed price, reflecting the time value of money and the risk that the deal falls apart
National Security and Investment Act 2021
The UK regime that lets the government review acquisitions in sensitive sectors
Net leverage
Net debt divided by annual EBITDA, a standard measure of how indebted a company is
No shop clause
A promise not to look for, or engage with, rival bidders
Offer document
The formal offer to shareholders, with every term and condition
Post Closing Measures
Corporate steps taken after the offer settles that move the entire business to the bidder
Premium
The extra a buyer pays over the current share price
Prepackaged Chapter 11
A US bankruptcy case where creditors vote on the plan before the company files, so the court process can move very quickly
Private M&A Deal
A sale negotiated directly between a private owner and a buyer, rather than an offer made to public shareholders
Proxy statement
The document sent to shareholders before a vote, explaining the deal and recommending how to vote
Public-to-private transaction
A deal in which a buyer, often a private equity fund, buys every share in a listed company and takes it off the stock market. The company then becomes privately owned.
PUSU deadline (Rule 2.6)
"Put up or shut up" — a deadline, usually 28 days after a possible bidder is publicly named, by which they must either announce a firm intention to make an offer or walk away and stay out for six months. Stops companies being left in prolonged bid speculation.
Restructuring support agreement
A contract in which a company's main creditors and investors commit in advance to support an agreed rescue plan
Reverse termination fee
Money the buyer pays the target if the buyer fails to close
Reverse triangular merger
The buyer creates a new shell company, the shell merges into the target, and the target survives as a subsidiary of the buyer
Schedule 13E 3
An extra SEC disclosure required in going private deals where insiders are buyers, setting out why they think the price is fair
Schedule 13E3
The SEC's enhanced disclosure document for going private deals involving affiliates
Scheme Implementation Deed
The contract in which bidder and target agree how a scheme will be run, including conditions, deal protections and timetable
Scheme of arrangement
A court-approved procedure under Part 26 of the Companies Act 2006 for restructuring a company or completing a takeover. Requires approval from a majority in number, representing 75% in value, of shareholders voting, then court sanction. Common for recommended (friendly) UK takeovers because it lets a bidder acquire 100% of the target in one step, without needing to reach the 90% squeeze-out threshold used in a contractual offer.
Section 510(b) of the US Bankruptcy Code
A rule that pushes claims arising from buying or selling a company's own securities down to the same rank as shareholders
Sell-out right
Under section 983 of the Companies Act 2006, once a bidder has acquired 90% of a target through a takeover offer, remaining minority shareholders can require the bidder to buy their shares too, on the same terms — the flip side of squeeze-out.
Senior subordinated notes
Bonds that rank behind bank loans if the company runs into trouble
Share purchase agreement
The contract transferring the shares
Shareholders' agreement
A contract between owners setting out who controls what
Shelf registration
A pre filed registration statement with the SEC that lets a listed company sell shares quickly
Sogo shosha
Giant trading houses that invest across energy, metals, infrastructure, consumer businesses and more
Specific performance
An order forcing the other side to do what it promised
Squeeze-out
Under sections 979–982 of the Companies Act 2006, once a bidder has acquired 90% in value of the shares (and 90% of the voting rights) covered by a takeover offer, it can compulsorily buy out the remaining minority shareholders on the same terms — allowing it to take full, 100% control.
Strategic Owner
A buyer that runs businesses in the same industry, rather than a purely financial investor
Support agreement
A promise to vote his shares in favour
Takeover Code
The UK rulebook for bids for listed companies
Takeover offer
A public offer by the bidder to buy shares directly from each shareholder, and each shareholder decides individually whether to accept. To get full ownership, the bidder usually needs 90% acceptances, which lets it use the statutory squeeze out (the right to compulsorily buy the remaining shares).
Takeover offer (Part 28 offer)
A contractual offer made directly to a target company's shareholders under Part 28 of the Companies Act 2006, as opposed to a scheme of arrangement. Can be used for both recommended and hostile (unsolicited) bids, and typically requires acceptances reaching 90% before squeeze-out becomes available.
Tender offer
An offer to buy shares directly from shareholders, regulated by the SEC
Termination fees
Agreed payments if the deal falls through in particular situations
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Ticking fee
Extra money that builds up if completion is delayed
Transaction Process Deed
A preliminary contract setting the rules for exclusivity and information access
Up C structure
The listed company is a holding company whose main asset is a stake in an operating partnership, while some original owners hold partnership units directly
Voting and support agreement
A promise to vote their shares in favour
Voting and support agreements
Binding promises to vote in favour and not to sell their shares or join class actions against the deal
VWAP (volume-weighted average price)
The average price a share has traded at over a given period, weighted by how many shares traded at each price. Often used in takeover announcements to show the premium a bidder is offering relative to recent genuine trading activity, rather than just a single day's closing price.
WpÜG
Wertpapiererwerbs und Übernahmegesetz, Germany's statute governing public offers for listed companies
Written consent
Shareholders signing a document instead of voting at a meeting