Globalcrossroadscapital.com reports on use of Termination Fees in M&A activity

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) July 15, 2010 -- Hooters Hotel-Casino near the Strip of Las Vegas has been for sale for some time. Previously, a buyer attempted to buy the hotel and a termination fee applied in the negotiations. The termination fee said the attempted buyer could have exclusive bid for 6 months on the property while coming up with all the financing.

But if the buyer backed out or couldn't come up with financing then the termination fee paid at beginning of the 6 months was forfeited. The buyer reportedly made 6 failed buy attempts and forfeited the termination fee of $500K six times.

In 7/10, ADC Telecommunications, Inc. has agreed to be bought by Tyco Electronics for $1.25B. ADC is the #32 largest firm in Minnesota that was founded in 1935. It is based in Eden Prairie; which was recently polled as the best city in US to live in. Tyco Electronics is a NYSE listed firm based in Switzerland.

In the event the deal collapses, ADC may be required to pay Tyco a termination fee of $138M. Tyco reportedly will incur between $110-$130M in "severance and integration costs" during the M&A.

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