Originally Posted by
Reversethrustset
Question for those in the know. I bought Flybe shares a while ago. If IAG buy Flybe what will happen to Flybe shares?
Depends on the intent of whoever the acquiring company is. No doubt Flybe have or will undertake share buyback, reducing supply of their shares on the open market, therefore (hopefully) bolstering the share price (limit supply, to drive investor demand).
In terms of what may happen to your stock, well there's a few possible scenarios which may unfold:
The acuiring company might suggest to buy the Flybe shares at a premium offer price per share that will exceed current market pricing and that could help drive present stock holders to sell up their holdings in the stock. That may become lucrative for you depending on your original purchase price per share, and don't forget if you end up with a capital gain, you got CGT liability. You may not have the option to do a bed & breakfast transaction under present circumstances which ordinarily is a method to reduce your CGT liability. Watch that space!
A lot depends on the nature within which any acquiring company is preferring to execute the acquisition of Flybe. If it's a cash exchange, whoever is buying Flybe will buy at a proposed and agreed share price, and Flybe shares will be replaced with the cash.
Or, who knows but the acquiring company might offer to replace Flybe shares with shares of the company doing the acquisition. You might end up with some combibation of cash and stock offer but anything could happen in a M&A event.