Quote:
Originally Posted by jyl
Not a broker, but - Answer is, there is no general answer. Depends on how the transaction is structured - cash or stock.
Cash - Company B could buy Company A's shares for $6.00/sh cash. In which case post-merger, a former owner of 1 share in Company A simply has $6.00.
Stock - Company B could exchange 0.2 Company B shares for every 1 Company A shares. In which case post-merger, a former owner of 1 share in Company A now has 0.2 Company B shares, which is worth 0.2 x whatever Company B shares are trading at. $8 if Company B's shares are still $40, but that's not guaranteed.
Cash plus stock - can have some combination of the above.
You have to read the details of the deal, which will usually be in the press release.
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(Not a broker either.)
"jyl" pretty much answers it. I would just add that if you didn't find the details in any press release the company does, the details will be in the companies' SEC (Securities and Exchange Commission) filings -- if the company is publicly traded.
I actually find it easier to review SEC filings using this site rather than going directly to the SEC's site:
http://www.pinksheets.com/pink/index.jsp
Enter the company's symbol, then click on the "Filings" tab to see the latest SEC filings, or any historical filing.