Recently, Stephan May, Managing Director at Welch Capital Partners (Formerly Welch Group) moderated a discussion on “The Role of the Board in M&A transactions: Creating Value and Minimizing Risk”. Below, we’ve highlighted some key notes form the speakers.
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Kim (CENX) – “Board needs to keep the company focused on executing the business and avoid distraction from the M&A process. If not the risk is that, it can become all consuming. Many in organization will want to be involved with the process, which can lead to distraction from the business that still needs to be run. So the board can help make sure the process is tightly controlled, and involve only those in the organization who are critical to the transaction, and ensure the organization remains focused on delivering business goals.”
Lorraine (GowlingWLG) – “Directors must be sensitive to possible management bias in respect of a potential transaction and careful with situations where management is emotionally invested to the point of potentially losing objectivity in pursuing a target. It is important for the board to maintain objectivity and not “fall in love with the deal”. A clear business case should outline why the transaction is essential and how it enables the growth strategy.”
Jacqueline (Calian) – “during the acquisition process, as soon as we get any sense that someone on the side of the company being acquired is not being completely upfront and transparent, then it’s a reason to seriously consider stopping the process entirely. A process where the culture of the target company is not one that instills trust, can not result in a successful negotiation or subsequent integration.”