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Sir, when considering the premium to be paid to the shareholders after the sale of the fridge division, why are we not taking off the share capital attributable to the fridge division? Why are we taking into account the entire share capital?
The buy-out involves taking over the whole company. (The will be closing the parts division down, but that won’t affect how many shares there are in the company).
And if I may add John; a management buyout is the attribution of the shares of the division which has been earmarked for sale to existing shareholders of the group not entirely new shareholders. This may also explain why the share capital attributable to the fridge division isnt excluded.
There is no share capital attributable to the fridge division!!!!
They are closing one division, but that in itself does not mean the shares change – the existing shareholders still own the same shares in the company as they did before.
There is going to be a MBO – so the management will buy the shares in the company (having closed the division) from the existing shareholders. Whether the management currently own any of the shares is completely irrelevant.
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