question re when a company gets taken over, page-4

G'day Will,

The last two post didn't answer your question so I'll give it a go.

From my experience a take over is usually done in script (shares in the company taking SDL over).

So lets say BHP buy SDL (note: I don't think this will happen, its just an example!!!)

If BHP shares are trading at A$40 each and they offer (and the majority of holders accept) A$1 per SDL then each holder will get 1 BHP share for every 40 SDL shares they own. Which effectively means you have made a A$0.87 profit on each SDL share you own and the BHP are yours to do with as you please. Sometimes companies offer cash and script so using the above example you may get A$0.50 per share and 1 BHP share for every 80 SDL share you hold.

As for if it is a good thing, well a takeover target usually sees a large increase in their share price very quickly so it just depends what you consider your SDL target price to be.

Hope this helps,

Ben