I've never owned shares in a company that eventually got taken over by another one.I was just wondering what happens in such a case?
This is my understanding of how a takeover might happen (I could be wrong - someone correct me, or add to this):Company B appears to be doing very well, with lots of prospects. But it is so cheap that another company A looks at how it could benefit from owning the resources of Company A.
Either one of the 2 scenarios (or more) happens :
Company A makes an offer to management of B, and after shareholders vote to approve the deal, A takes over B.
Company A accumulates enough shares in B and become so powerful that it only needs to convince a few holders in B to be in the majority, hence the takeover.
My question is what happens to the shareholdings when Company B is taken over?
Do holders in B become holders in A?
What if holders in B don't want to be holders in A? Will they be forced to sell?
What is the attraction in holders in B wanting to be holders in A?
From discussions I have been following over the years, it seems a lot of holders look forward to being taken over. I always thought it should be the opposite (since holders in B can potentially make more from their resources, rather than join another company resulting in too many shareholders on the new updated register).
Company A may be already established and earning money. Do the new shareholders from B start receiving dividends that holders in A were getting?Is that the attraction, i.e. enjoying dividends of Company A (which they may not have been getting from Company B yet)?
