Takeovers: effect on company making the bid?

[coolacoola]

Hi

My question is in regards to companies buying othercompanies though share offers. For example Westpacs 1.31 share takeover for St George and BHP's 3.4 for Rio.

What does this usually do to the company that makes the takeover (e.g. westpac) on the day they give out those shares (if this is how it works), Does the share price drop. If so what would happen in the medium term (e.g. would it steadily rise)

Thanks for your help

 

[nunthewiser]

Re: Takeovers

Hi

My question is in regards to companies buying othercompanies though share offers. For example Westpacs 1.31 share takeover for St George and BHP's 3.4 for Rio.

What does this usually do to the company that makes the takeover (e.g. westpac) on the day they give out those shares (if this is how it works), Does the share price drop. If so what would happen in the medium term (e.g. would it steadily rise)

Thanks for your help

varys on how the punters regard the asset they are buying .. cash cow , dog with fleas , extension of product , new venture etc etc .. allsorts of scenarios , it does boost the actual market cap a great jump when using script in a T/O tho and one hopes that this is justified from the bottom line after

 

[nunthewiser]

P.S

also depends on what the actual product is that the punters /takeovers are paying for ........ BHP buying RIO is getting a bagful of iron ore at present amongst other bits but iron ore aint too popular at present ..........

 

[coolacoola]

Hi
How about Westpac/St George. St George looks preety good with the results they have released, anyone caring to predict how westpac's price will go after they give the 1.31 shares for every St George one?

Thanks