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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Josh Sliver who wrote (11988)	2/7/2001 1:51:17 PM
From: Paul Senior	Respond to of 78512

I'll jump in with an answer before someone who really knows gives the correct response. If the transaction is 1:1, stock for stock, then I say it depends on what is meant by shares outstanding. I say that B, if B is the buyer, with 500 shares outstanding, has to give out a total of 300 shares for each share of A outstanding. If all of B's 500 shares are already distributed among B's shareholders, then B has to come up with 300 additional shares by issuing stock (300). But if only 200 of B's shares are distributed among shareholders -- and the other 300 are held by the company as treasury shares (allocated to be used for business purposes)in the company's equity section (the total thus still being 500 shares outstanding), then B could issue those 300 for A's shares. So after the deal is done, in that case the answer is 500 shares issued and outstanding. Similar logic if A is the buyer. Answers depend on how much, if any, treasury stock is available. Paul who is wrong many, many times