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merger and sharesmerger and shares
sdfrgtyu said: "A private Comany B is merging with a public Company A.
The owner of company B is getting 25% shares in company A as a result of the merger.
Now, given that Company A's shares are already owned by the public, how is this possible?"
thezster said: "All the shares aren't public.... the company owns a substantial quantity of shares in itself..."
sdfrgtyu said: "Oh ok. Makes sense.
Ok, let us say that the company A originally had 100 shares of which 50 are public and 50 are internal (I dont know if that is a common ratio of distribution), now they pay 25 internal shares to acquire a company B. Will company B be able to sell thost 25 shares in the public market (in which case the public will ultimately own 75 shares)?"