In a merger, where do you want to be?

Last post 07-28-2008 12:46 PM by bchirhart. 9 replies.

Page 1 of 1 (10 items)
	Sort Posts: Previous Next

07-26-2008 11:38 AM

bchirhart
Joined on 05-04-2008
Posts 4

In a merger, where do you want to be?

When you have two similar companies merging, who's stocks do you want to be holding? Company A is at $20.00 a share Company B is at $10.00 a share. A is taking over B. Everything has been approved, but it hasn't happened yet. Do you want to be holding A or B or either or both?

Filed under: MERGER

07-26-2008 12:52 PM In reply to

SANDPIPER
Joined on 10-05-2007
Posts 463

Re: In a merger, where do you want to be?

I would try to get an equal number of shares and see which works or doesn't, after all this is a game so you can't really lose. If you are getting shares for real, just get a few of each. Going to try to do the same.

07-27-2008 7:25 AM In reply to

podstock
Joined on 05-11-2008
Posts 1,166

Re: In a merger, where do you want to be?

I'll take B, depending on my cost basis prior to the announcement that A was taking over B

07-27-2008 9:40 AM In reply to

karand
Joined on 07-10-2007
Posts 5,600

Re: In a merger, where do you want to be?

well usually it is the company who is being taken over who benefits the most...the don't have to lay out the cash and their stock gets the increase...for instance...if inbev buys bud ....i was holding bud stock at $57/share in my long term portfolio...inbev is offering a buy out of $70/share ....they are putting up the money and the bud stock goes to $70/share if you had bud you win....inbev may actually go down because of the cash outlay at the time...of course over time it shoould go back up because of the deal ...that is what they are counting on ....

07-27-2008 11:04 AM In reply to

J828
Joined on 04-24-2007
Posts 1,689

Re: In a merger, where do you want to be?

Typically you want the one being bought out. Prices tend to move towards one another.

07-27-2008 12:26 PM In reply to

dewdrinkrt78
Joined on 05-11-2008
Posts 1,048

Re: In a merger, where do you want to be?

So in the XM sirius merger youd want to own....?

07-27-2008 3:55 PM In reply to

BigNeerav
Joined on 01-04-2008
Posts 782

Re: In a merger, where do you want to be?

karand:
well usually it is the company who is being taken over who benefits the most...the don't have to lay out the cash and their stock gets the increase...for instance...if inbev buys bud ....i was holding bud stock at $57/share in my long term portfolio...inbev is offering a buy out of $70/share ....they are putting up the money and the bud stock goes to $70/share if you had bud you win....inbev may actually go down because of the cash outlay at the time...of course over time it shoould go back up because of the deal ...that is what they are counting on ....

I agree. Normally, what you see is the company's stock going up, of the one being bought out. Therefore, Karand is correct here, as well as others that mentioned that you should be in Company B. For example, if you are Yahoo!, your stock price, as Karand mentioned, would go higher, if Microsoft was to buy Yahoo! It is always better to be in the position of the company being bought, rather than the company buying, especially as a stockholder.

07-27-2008 7:55 PM In reply to

r1a2c3e
Joined on 10-17-2007
Posts 629

Re: In a merger, where do you want to be?

Usually it is Company B. However, it is good to look at the price the company is willing to pay for Company B, and see how that compares to the current stock price.

07-27-2008 10:04 PM In reply to

majik13
Joined on 02-25-2008
Posts 1,884

Re: In a merger, where do you want to be?

B all the way.

07-28-2008 12:46 PM In reply to

bchirhart
Joined on 05-04-2008
Posts 4

Re: In a merger, where do you want to be?

Excellent - thanks guys.

I was going to buy Sirrus for the XM merger. Looks like I was on the right track.

Page 1 of 1 (10 items)