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Pricing issues and post-transaction issues

The form of consideration for a

takeover

2.1 Three most common forms of consideration

Cash offer Share for share Earn-out
exchange

Target company The bidding company The consideration is
shareholders are issues some new split so that there is an

offered a fixed cash shares and then initial amount paid at
sum per share. exchanges them with the time of acquisition,
the target company and the balance
shareholders. deferred (and only paid
if the target entity
achieves specified
performance targets).

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