Page 257 - AFM Integrated Workbook STUDENT S18-J19

Strategic aspects of acquisitions

The offer

5.1 Introduction

When one firm makes an offer to buy another, the key considerations
are:

 What form of consideration should be offered? Cash offer, or
share exchange, or earn-out are the three main choices.

 If a cash offer is to be made, how should the cash be raised? The
choice is generally debt finance or a rights issue to generate the
cash (if the entity does not have enough cash already).

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