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Stock or cash price

Your client is the 100% shareholder of company X. Company Y wishes to acquire all of company X. Your client has asked you for your advice whether he should merge his company with Y and accept some stock in the new entity and cash, or accept a cash price for his company. What is your advice and why?

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The decision to merge the Company X with the company Y and accepting shares in the new merged entity vis-a-vis the decision to accept a cash price entirely depends on my client's outlook with respect to the future prospect of the business after the proposed acquisition by company Y. IF my client feels that the acquisition will be ...

Solution Summary

Your client is the 100% shareholder of company X. Company Y wishes to acquire all of company X. Your client has asked you for your advice whether he should merge his company with Y and accept some stock in the new entity and cash, or accept a cash price for his company. What is your advice and why?

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