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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Acquisition
Dear Sir,
In the Mar/June 2016 Q2, how is it that the acquirer can use the acquiree’s cash to pay for the cash offer? Shouldnt the acquirer need to have the necessary funds in place to pay for their own cash offer to the acquiree? Please help
It is not a problem 🙂
Suppose I offer to buy your company (and you own all the shares in your company).
I will not pay you unless you have accepted the offer.
If you have accepted, then I own your company and therefore I can use the cash in your company to help pay you what I offered you 🙂
Thank you sir
You are welcome 🙂