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Message: <blockquote data-quote="19vanessat" data-source="post: 129606" data-attributes="member: 21590">Q1) Why do you think Digion wants to buy Immersive?<ul> <li data-xf-list-type="ul">Digion wants to acquire the valuable IP of Immersive</li> <li data-xf-list-type="ul">Digion wants to leverage the expertise of Immersive’s 2 co-founders, who have a lot of experience in game server hosting</li> <li data-xf-list-type="ul">Digion believes that its acquisition of Immersive will boost its popularity and PR image, because Immersive is popular amongst game developers<ul> <li data-xf-list-type="ul">They will gain more market share as more game developers are attracted to their service to make games</li> </ul></li> <li data-xf-list-type="ul">International expansion: this seems to be part of their strategy this year to rapidly expand across the globe</li> </ul>Q2) How would you advise Elena handle the situation with Tristan?<ul> <li data-xf-list-type="ul">Reach out to Immersive leadership including Tristan to talk it through, understand Tristan’s concerns</li> <li data-xf-list-type="ul">Convince them of the benefits of the acquisition</li> <li data-xf-list-type="ul">If unsuccessful, offer Tristan special perks such as increased financial perks, a position where he can do what he likes, dual-class shares etc</li> </ul>Q3) What is the purpose of Clause 5 in Document 3?<ul> <li data-xf-list-type="ul">Clause 5 stipulates the conditions precedent that have to be completed before the deal can conclude</li> <li data-xf-list-type="ul">It ensures that due diligence is completed, and that the target company’s Articles of Association are conducive to the acquisition </li> <li data-xf-list-type="ul">It protects Digion’s interests against any changes in the target company’s health</li> <li data-xf-list-type="ul">Ensures regulatory compliance - that CMA approval </li> </ul>Q4) In Clause 7, note the phrase, 'The Seller’s liability under the warranties and indemnities shall be subject to limitations.' Suppose you were the lawyers acting for the Seller, what could you do to limit the Seller's liabilities? Why is this important?<ul> <li data-xf-list-type="ul">Conduct due diligence on any existing investments or assets (e.g. real estate... etc) <ul> <li data-xf-list-type="ul">There may be assets that the purchaser sees as unnecessary or risky and want to get rid of it/stipulate conditions in the acquisition agreement</li> </ul></li> <li data-xf-list-type="ul">Conduct due diligence on outstanding litigation<ul> <li data-xf-list-type="ul">This is important because if it’s not settled and the target loses, the purchaser is liable to pay for any damages awarded</li> <li data-xf-list-type="ul">Purchaser/Seller must thus ensure there’s an indemnity in place against any potential costs</li> <li data-xf-list-type="ul">The nature of the outstanding litigation may also influence the target’s business prospects and overall health. For example, losing an important IP litigation means they lose a key part of their business etc.</li> </ul></li> <li data-xf-list-type="ul">Conduct due diligence on pension scheme liability<ul> <li data-xf-list-type="ul">Purchasers are liable for future pension payments as well as payments that accrued due to work carried out pre-acquisition</li> <li data-xf-list-type="ul">Check that the target has enough money set aside to fulfill this</li> <li data-xf-list-type="ul">Set up a warranty with regards to this</li> </ul></li> </ul>Q5) Why could it be important to Digion that 'the courts of England have exclusive jurisdiction to settle any dispute'?<ul> <li data-xf-list-type="ul">Digion is headquartered in London, under the courts of England, whereas Immersive is Frankfurt-based</li> <li data-xf-list-type="ul">This ensures that Digion has home advantage and would not need to pay additional costs associated to settling under German law (e.g. hiring German lawyer etc)</li> </ul></blockquote>

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