Re: Whatever is going on -
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Message: Whatever is going on -
When companies like Microsoft and Google acquire other companies do they buy 100% of the stock?
Like do they hunt down all the shareholders and get them to sell their stock?
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''For US Companies, the answer is yes. Full acquisition is typically how it is done, however, companies like MSFT or GOOG can do a deal through different ways - a stock buy via cash as mentioned is one way, but they can also do a deal via stock swap - in which the existing shareholders would exchange their shares for shares of MSFT or GOOG stock at a negotiated ratio that reflects the valuation of the purchase.
As for the whole "hunt down all the shareholders" bits... for the most part it's not really what usually happens - First of all most of the time big companies in tech tends to acquire smaller, privately owned companies with limited # of shareholders (ex. investors and options due to employees), so "hunting down the shareholders" isn't really an issue. Founders and institutional Investors typically have a say on the board and employees with options can't vote. In the case of larger, publicly traded companies, the negotiation is typically done on behalf of all the shareholders by the board of directors. If it's approved, then company typically would go out on the open market and buy the shares at a specific price from all the shareholders out there.
In the case of publicly listed and traded companies -
A) when an acquirer wants to absorb the acquired company and de-list it from the stock market here are some of the things that happen:
1. as per the regulatory rules of a particular country or region - the company needs to buy a fraction of stock called the "controlling stock" and after that it has to out out an open offer to buy remaining shares at a specific price --
This "open offer" is normally done by writing to all stockholders about the open offer and by advertising it in major newspapers and journals and the company's websites etc.
2. During the time the acquirer is trying to get a controlling stake- the price of the acquired company's share may shoot up and often the price offered during the "open offer" period is somewhat less than what the share price was when it was at the Peak of market frenzy.
3. Any shares remaining with individual shareholders after the merger is completed will be worthless after the "open offer" period ends.
4. It may but the shares for cash or it may issue a certain number of acquiring company shares in exchange for the shares of company being acquired.
B) when an acquirer buys and acquires the company but still runs it as an independent publicly listed company:
There may be a market frenzy when shares are being acquired but there is no deadline or "open offer" after which the company's shares with individual shareholders become worthless -- instead the company continues to be listed and markets continue to trade the company's shares as before.''
A) when an acquirer wants to absorb the acquired company and de-list it from the stock market here are some of the things that happen:
1. as per the regulatory rules of a particular country or region - the company needs to buy a fraction of stock called the "controlling stock" and after that it has to out out an open offer to buy remaining shares at a specific price --
This "open offer" is normally done by writing to all stockholders about the open offer and by advertising it in major newspapers and journals and the company's websites etc.
2. During the time the acquirer is trying to get a controlling stake- the price of the acquired company's share may shoot up and often the price offered during the "open offer" period is somewhat less than what the share price was when it was at the Peak of market frenzy.
3. Any shares remaining with individual shareholders after the merger is completed will be worthless after the "open offer" period ends.
4. It may but the shares for cash or it may issue a certain number of acquiring company shares in exchange for the shares of company being acquired.
B) when an acquirer buys and acquires the company but still runs it as an independent publicly listed company:
There may be a market frenzy when shares are being acquired but there is no deadline or "open offer" after which the company's shares with individual shareholders become worthless -- instead the company continues to be listed and markets continue to trade the company's shares as before.''
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