Staple Financing – The Case of BP by A. Guzman and Prof. Ian Cooper, London Business School The term staple financing (SF) refers to a situation in an M&A transaction in which the financing arm of the sell-advisory bank “staples” a financing offer to the asset or target company being sold. The buyer (s) can choose to accept or not the SF offer. In theory SF is attractive to sellers because it mitigates the risk that the buyer is unable to raise financing to acquire the asset, decreases the time to closing the deal, and sends a comfort signal to buyers, which could potentially result in a higher sale price. In practice, some sellers (e.g. BP) see that SF adds marginal value, and are concerned with the conflicts of interest between the sell-advisory and buy-financing role of banks. File size: 883 KB
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