Tag-Along Agreement (also called ‘Co-sale or Take-Along Right’)

A contractual agreement by management stockholders, typically in connection with a venture capital investment, that they will not sell any of their stock in the company without giving the investors the right to participate in the sale with the management sellers pro rata to their holdings. Compare with ‘Bring-Along Rights.’

Take-Along Right

See ‘Tag-Along Agreement.’

Takedown Schedule

The plan stated in a private equity fund’s memorandum to provide for the actual transfer of funds from the limited partners to the general partner’s control.

Takeover

Acquiring control of a corporation by stock purchase or exchange, either hostile or friendly.

Takeover Code

See ‘City Code.’

Takeover Panel

The UK regulatory authority responsible for administering the City Code on Takeovers and Mergers. See ‘City Code’ and ‘Takeover Code.’

Tangible Book Value

See ‘Book Value per Share.’

Target Company

The company that the offeror is considering investing in. In the context of a public-to-private deal this company will be the listed company that an offeror is considering investing in with the objective of bringing the company back into private ownership.

Tax Basis

See ‘Basis.’

Teaser

A short company presentation sent to potential investors before a sale or auction.

Tender Offer

A formal offer to all or a large group of stockholders to purchase their shares on fixed and substantially non-negotiable terms. The party making the offer customarily reserves the right to accept all, none, or a specific number of the shares presented for acceptance. In the USA, tender offers of public companies are regulated under the Securities Exchange Act of 1934. In the UK, tender offers are regulated by the City Code on Takeovers and Mergers and the Panel on Takeovers and Mergers. See ‘Takeover Panel.’

Term Sheet

A short document summarizing the principal financial and other terms of a proposed investment. It usually is non-binding, but may impose some legal obligations on the investor and the company. Similar to a letter of intent. See ‘Letter of Intent.’

Termination for Cause

Termination of an employee’s employment with justification, typically defined in some detail.

Thin Market

A market for securities typified by very few bids to buy or sell. Markets may be thin either because there exists a small float or because of a lack of interest in the stock.

Tippee

(USA) A person who receives from another person material information that has not been made public about a public company. See ‘Tipper.’

Tipper

(USA) A person who informs another person of material information that has not been made public relating to a public company. In the USA, under the Securities Exchange Act of 1934, the Tipper is jointly liable with his or her tippee who trades on the basis of the inside information, and is subject to civil penalties of up to the greater of three times the profit gained or loss avoided or $1,000,000, and to criminal penalties of up to 10 years in jail. See ‘Tippee.’

Total Value to Paid-In (TV/PI)

A realization ratio which is the sum of distributions to paid-in capital (D/PI) and residual value to paid-in capital (RV/PI). TV/PI is net of fees and carried interest.

Trade Date Plus Three (T+3)

A term used to define the date for settlement of trades as being within three business days of the date of the trade itself. In the context of a registered US public offering, it would mean that shares are issued and money is received three business days after the effective date of a registration statement. T+3 is the norm for most USA and European securities markets, although there is some movement to an even shorter settlement of T+1.

Trade Sale

The sale of company shares to industrial investors.

Trade Secret

Information, such as a formula, pattern, device, or process, that is not known to the public and that gives the person possessing the information a competitive advantage. May sometimes include customer lists, marketing, and/or business plans, and suppliers.

Tranche

Funds flowing from investors to a company that represents a partial round or an ‘early close.’ Subsequent funds of the single round are generally under the same terms and conditions as the first tranche (or early close), however, those funding the early tranches may receive bonus warrant coverage, in consideration of the additional risk. (a French word meaning a slice or cutting).

Transfer Agent/Registrar

The agent of a company responsible for the issuance of stock certificates, registration of stockholders’ names, and re-registration of new holders when a transfer of stock occurs.

Treasury Stock

Stock that has been reacquired by the issuing company and has not been cancelled and returned to the status of authorized but unissued stock, but instead occupies the status of issued but not outstanding stock. Not applicable in the UK.

Turkey

An offering of securities that performs poorly.

Turnaround

See ‘Rescue.’