2006-12-15 03:09:26 · 14 answers · asked by PAUL B 1 in Business & Finance ➔ Investing
If they are public quoted shares, the price of the shares may well go up prior to the take-over, and you can sell them. You may not have grasped that a share is a share of the company itself...the company taking over will just be buying the same shares (but more of them...). The share price may rise if the take-over company is willing to pay over market prices. If you sell, then the new company might be indirectly buying your shares, if you keep them, you still own your part of the 'new' company.
Simply put, a take over company will be looking to buy a 'controlling interest' ie. probably more than 50% of the shares, the remainder of the shares will remain owned by by others.
Your only worry is if the company itself goes bust - then your shares may be worth nothing....take-overs are not neccesarily anything to be concerned about, other than they are a good opportunity to sell your shares.
Hope this helps
2006-12-15 03:21:34 · answer #1 · answered by ? 7 · 0⤊ 0⤋
A few things could happen that I know of. I worked with brokers for 14 years. Even had a license. Know something about the subject.
1. You can sell them prior to the takeover, which is usually hostile. (That is what happened to may Co. and their stock went from 6 a share to .25. Look up GTAX they got delisted too).
2. Your shares will be merged into the new company, if it's worth anything keep the stock. For example, when Federated bought out Macy's. Federated is huge. If the new company is also on one of the large exhanges, Dow, AMEX - good shot at being a good company. If the new company bigger fish, keep the stock. May have good things coming, may not.
3. The new company can be delisted from the exchange over time due to certain factors. Such as, they need to have a minimum earnings etc, to stay on that exchange. And you could get screwed.
4. You didn't mention the name of the company. If you have inside information and going to sell this stock, you could be the next Martha Stewart.
2006-12-15 03:24:29 · answer #2 · answered by jayndee13 4 · 0⤊ 0⤋
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2016-02-16 07:55:53 · answer #3 · answered by ? 3 · 0⤊ 0⤋
Your company will go in as a subsidiary of the acquirers company and your share will be exchanged at a ratio called exchange ratio or swap ration determined by the acquirer so as not to dilute their own shares. This is when it is a stock swap acquisition.
If it is a cash acquisition, then you can tender your shares for the price tendered by the acquirer which usually will be at a premium consdiering all the economic. regulatory and ethical factors.
Then there is LBO, leveraged buyout in which case you might wind up like the cash acquisition. Your company might also be sold in piece meal fashion to small investors after acquisition. For example, when Nabisco was taken over by KKK partners it many of it's assets were sold piecemeal. They keep some or even sell it off at premium to third party buyers. I think the original acquirers kept only the Oriole cookie line and sold off rest of it. LBO's are frequently used nowadays by raiders and also when employees buyout their company from stock holders. What they do is the leverage undertaken is reduced by raiding the cash hoarde and even the pension fund of the acquiree after acquisition and the rest is reduced by selling assets at premium. The acquirers keep the premium and dismantle the original corporation in the bargain to smaller versions.
2006-12-15 05:13:01 · answer #4 · answered by Mathew C 5 · 0⤊ 0⤋
Depends. In most cases if your shares are taken over by a public company than your shares are converted into shares of that company. If taken over by a private company than you get cash for the value of your stocks
2006-12-15 07:01:23 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Unless the new company changes things in the stock it should remain about the same, but you could also loose the stock if the company doesn't want to honor it, I think.
2006-12-15 03:30:46 · answer #6 · answered by golden rider 6 · 0⤊ 0⤋
They are converted over to the new company
2006-12-15 03:12:02 · answer #7 · answered by Jet 6 · 0⤊ 0⤋
DEpends what was agreed between your company bosses and the bosses taking over. We've just gone through the reverse, been taken over and now we have shares... hmmm... maybe I've got yours!
2006-12-15 03:11:29 · answer #8 · answered by PhoenixRights 4 · 0⤊ 0⤋
u will get new company shares
2006-12-19 02:37:38 · answer #9 · answered by udayashanker k 3 · 0⤊ 0⤋
If it is a hostile takeover, your shares will be beaten and forced to work in the mines.
2006-12-15 10:32:56 · answer #10 · answered by Don't Panic 2 · 0⤊ 0⤋