Protection from Bankruptcy in the Acquisition Process

Abstract

Purpose – t he a im o f t he p aper i s t o p resent a scheme, which was developed for the analysis of acquisitions in terms of protection from bankruptcy. It was also shown that the scheme can be used in calculating the number of shares, the purchase of which will not be the subject, in theory, to bankruptcy. Design/methodology/approach – For the development of the proposed scheme, the authors used literature and tools- based on financial engineering, and the calculations were carried out on hypothetical data. Findings – Our calculations show that the proposed scheme can be used for the assessment acquisitions of companies; however, it should be taken into account that a number of important assumptions may significantly affect the final evaluation. Originality/value – The development can be considered as complementary to current knowledge on mergers and acquisitions. You can recognize them also as a contribution to separate quantitative research and a voice in the discussion, needed for the development of the subject work.