if you just bought shares in company A say for 16p and realised a takeover was in position by company B who offer you 15.65p per share. is it wise to sell?
what the advantages and disadvantages for a shareholder in a takeover situation.
thank you
2006-08-17 03:45:44 · 3 answers · asked by passport212000 1 in Business & Finance ➔ Investing
A business is owned by its shareholders. In a takeover situation another company offers to buy more than 50% of the shares from the current shareholders and merge the two companies. They may offer to pay in cash or they may offer to pay with new shares in the combined companies.
It doesn't matter what you bought the shares for. The only judgement you have to make is whether the amount of money you are being offered for your shares is reasonable and more than you are likely to make by hanging on to them. If the answer is yes you should vote in favour of the takeover.
2006-08-21 01:15:32 · answer #1 · answered by popeleo5th 5 · 0⤊ 0⤋
first thing to say is you did not know enough about the company to be buying at 16 when there was a live offer for 15.65.
Advantages in you situation
Company b see added value in either the assets of A or the company will be buying them out to shut it down and take all the residual business into b.
disadvantages you have bought into a company that is worth less now and may have no long term value
either way dump the shares unless they up the offer
2006-08-17 11:05:00 · answer #2 · answered by Anonymous · 0⤊ 0⤋
No because you'll make a loss on the shares.
Unless they offer other insentives.
Plus if the new company do better than the new company then yhe shares go up.
In a take over bid they normally offer above market price to get you to sell.
2006-08-17 10:52:40 · answer #3 · answered by David T 3 · 0⤊ 0⤋