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Technology Stocks : Zitel-ZITL What's Happening
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To: Daniel Chisholm who wrote (17231)10/6/1998 10:23:00 AM
From: Steven M. Kaplan  Read Replies (3) of 18263
 
Why Zenith? There is nothing fishy about that. They need to form this holding company in order to effectuate the merger of a public and a private company so that the shares of the new entity remain publicly tradeable:

The four most common types of mergers are the standard two-party, multi-party, triangular and reverse triangular mergers.8 The mechanics of these transactions are as follows:

· Triangular Merger: Corporation A forms a subsidiary, S, into which T is merged. A is the sole stockholder of S and votes all of its stock in favor of the merger. The effect is that T is merged into S, a wholly-owned subsidiary of A, and the outstanding shares of S, which remain outstanding, as well as the shares of A are unaffected by the merger. The shares of stock of T outstanding immediately prior to the effective time of the merger are converted into stock or other securities of A, cash or another form of permissible consideration.

· Reverse Triangular Merger: In a reverse triangular merger, the merger is effectuated in the same manner as a triangular merger, except that S is merged into T.
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