To: Chuzzlewit who wrote (2984 ) 7/30/1998 5:53:00 PM From: Geoff Nunn Read Replies (1) | Respond to
Chuz, we're in complete agreement about the negative consequences of stock-for-stock transactions in which firms paper over reality and mislead their shareholders. This, in itself though, is not so much an objection to how the deal is financed as it is to the accounting system pooling of interests. Perhaps the best way to handle your concern is to address the problem directly and reform the pertinent accounting rules.terms of the merger are wrong. If the acquiring firm overpays for the shares of the acquired firm, there's going to be unfavorable dilution no doubt about it. But if the buyer does its homework and gets the terms of the merger right, there shouldn't be a dilution problem.
