- This topic has 3 replies, 2 voices, and was last updated 9 years ago by
.
- Posts
In relation to ‘a share exchange of two shares in Bycomb for every three shares acquired in Cyclip ‘
What’s physically happening here? Are the directors of Bycomb giving two-thirds of the shares acquired in Cyclip to the shareholders of Cyclip?
I’m pretty sure I will be able to remember the formula (number of shares in parent / number of shares acquired in subsidiary) to give 2/3 as the multiplication factor but if I could get a sense of physical share certificates being transferred it may help me.
Unrelated to June 2015 Sect B Q 1(a), could there be a situation where a term of the acquisition could be ‘a share exchange of three shares in P for every two shares acquired in S’, thus giving a multiplication factor of 3/2?
Many thanks
In answer to the last part of your post, yes, of course there could!
First part of your post – we’re trying to persuade the shareholders of Victim Plc to sell us their shares. How we manage the deal is up to us, but it has to be attractive if enough of the Victim Plc shareholders are going to be persuaded to sell us their shares in Victim Plc.
We could offer them cash payable immediately, cash payable in the future, our own preference shares in Vulture Plc (that’s us), or even some of our own shares that we’ll create / issue specially for the deal.
We could make them an offer which contains all, just some, or even just one of those elements. What follows is where the transfer is entirely a share for share exchange
So Vulture Plc writes to all the shareholders of Victim Plc and says “Listen up, guys. Here’s the deal! We’ll give you 2 shares in Vulture Plc for every 3 Victim Plc shares that you transfer to us! Hey! How about that! It’s an offer you can’t refuse!”
And if enough (the holders of >50% of the equity shares) accept our generous offer, we’ll issue the required number of shares, they’ll transfer their former share holdings in Victim Plc and, Bob’s your uncle, we have a subsidiary!
Ok?
- You must be logged in to reply to this topic.