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All paper deal |
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All paper dealWhen one listed company bids for another company (listed or private), and offers to pay in three ways:all cash: the shareholders of the target company get cash for their sharescash and paper: the shareholders of the target company get some cash for their shares, and some of the shares in the bidding companyall paper: the shareholders of the target company only get shares in the bidding company for their shares in the target companyObviously, the attraction of an all paper deal to shareholders in the target company will depend on how much confidence they have in the bidding company (do they want to own its shares?) and whether they think the relative valuations of the two companies' shares are fair.There can be some tax advantages to taking shares from a bidding company, rather than cash. The swap of shares is not deemed to be a disposal of the target company shares, so there is no immediate capital gains tax liability. If you take cash for your shares, it is a disposal, and there may be CGT to pay.Similar MatchesCommercial paperCommercial paperA short term note issued by banks and corporations with a range of maturities from 30 days to 270 days. Commodity paperCommodity paperA loan or advance secured by commodities. WallpaperWallpaperA security with no monetary value. Euro commercial paperEuro commercial paperShort-term notes with maturities up to 360 days that are issued by companies in international money markets. PaperPaperMoney market instruments, commercial paper, and other. Further SuggestionsCommercial paperPaper dealer Direct paper paper profit Commercial paper paper loss Trading paper Paper gain (loss) |
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