Saturday Night Special
Categories: Marketing
It’s 1972, the Bee Gees are on the radio (it's a strong radio, and all of them together weigh only 400 pounds), and we’ve just had the grooviest idea ever: we want our company, Discobuild, Inc., to acquire Far Out Flooring, one of our suppliers.
A glance at the calendar tells us it’s Saturday, which means it’s the perfect day to put our plan into action. We’re going to issue a public announcement offering to buy shares of Far Out stock for $11 per share, which is a whole dollar higher than it’s trading on the market. Our hope is that enough shareholders will take us up on this offer before the big dogs over at Far Out figure out what’s happening. After all, since we’re rolling this out on a Saturday, there’s a pretty good chance people aren’t paying as much attention to things like these as they would during the week. Once we buy up enough shares, we can take over Far Out Flooring and make it part of the Discobuild empire.
This plan is what’s known as a “Saturday night special,” and the reason our example takes place in the ‘70s—other than the obvious opportunity to make disco references—is because Saturday night specials really haven’t been a thing since then. But back in the day, we could make a public tender announcement with a seven-day deadline, which means the acquisition target didn’t have a whole lot of time to organize their troops and stop the takeover. But when the minimum deadline was adjusted from seven days to 20, and then the SEC started demanding disclosure about certain kinds of mergers and acquisitions...it kind of took the wind out of the Saturday night special’s sales.
It’s a lot harder to pull off a sneaky acquisition when we have to disclose it to the SEC and stretch out the process over three weeks.
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finance a la shmoop what is the Williams Act
well it's 28 Grand Slam singles titles 26 in doubles eight Olympic gold medals [William's sisters career stats appear]
a successful designer clothing company and an interior design firm yeah like
you really thought shmoop wouldn't go there for this one come on the Williams
Act the financial one is actually about making acquisitions or takeovers fair
and square you know like a tennis court before 1968 when the Williams Act 1.0 [People playing tennis]
was enacted mega glopped gargantuan strollers could launch a takeover bid
for micro Corp shakers Rattlers and Hum to make a vertically integrated
near-monopoly in baby hardware the bid could have come in on a Thursday giving [Bid appears on calendar]
shareholders 48 hours to respond with say a 20% premium over the current share
price take it by noon Monday or leave it in the deal's off the table shareholders
would then have to quickly scramble to figure out this was no is this a fair [Woman scrambling away]
deal a steal or something else done just to disrupt the market well a bunch of
companies were quote stolen unquote this way with boards having to scramble and [Robber running away from police]
often ending up with less than optimal or full value that they were supposed to
get for their shareholders who they represent so the Williams Act came along
and required there to be a whole range of filings and disclosures whenever a
public takeover was announced like the price the terms the mix of stock and
cash what the newly composed company would look like it's out its out cetera
and it also required that there be at least five days from when the initial [Five days on calendar highlighted]
takeover was announced to there being any kind of definitive agreement and
then quickly investors realized that five days wasn't long enough so less
than a decade later yeah things move slowly in a financial regulatory world [Cash falling]
the Williams Act pause button was extended to 20 days and that's where
things stand today so yeah the Williams Act ensures [Williams act stamped fairness]
fairness or at least it tries to and that fairness you know which cannot be
said for the taking no prisoners Williams sisters those two do not know
the meaning of mercy [Tennis ball hits girl on the head]