# What happens to shares outstanding figure after takeover?



## Seneca60BC (4 March 2007)

Hi

I have a question relating to the number of shares outstanding after a takeover.  To keep things simple, lets forget about options for now.

Company A has 1 million shares currently outstanding.  Company A wants to takeover company B which currently has 500 000 shares outstanding.

Company A also offers Company B 0.5 shares of Company's A share for every 1 share in Company B.

So are my calculations correct?

Company A               Company B           Company New Shares
 1,000,000         +       500,000    +       (0.5 x 500,000)

= 1,750,000 now outstanding (after takeover is complete)

Is this correct?

Thanks


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## kaveman (4 March 2007)

If they are only offering 1 share of A for 2 of B then A will only need to create 250,000 new shares (half of B's 500,000)
so new total shares is 1,250,000


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## Seneca60BC (10 March 2007)

OK thanks Graham!


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