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So my Employer is being bought out by another company and I have used the share program to buy shares - its never been a large amoutn each month and certainly didn't get me many shares until Covid caused the share price to tank but what typically happens to the shares of the company being bought? Obviously this deal will be unique and the purchaser (probably) can follow their own rules and process so I'm just looking for what typically happens in this instance.
Likely you'll end up with an equal value of shares in the new company.
Yeah that was my guess but doesn't that have implications for the shareholders of the purchasing company by effectively diluting their stake in the company?
Mine ended up in recycling. Ho hum.
depends
assuming it's stock exchange traded shares, in which case all share holders will have them either converted to shares of the other company, or will have them bought out for cash typically at a beneficial rate compared to what they were trading at (unless it was a company basically going bankrupt and worthless).
and if you don't want shares in the new company, they'll more than likely have a scheme whereby you can sell them at whatever the price is, for no trading fee. no more effort than ticking one or the other ticky box on the form sent to all shareholders.
We got cold hard cash for our shares when we were bought, which was nice.
Wouldn't happen to be a telecoms company being taken into private ownership would it?
I was given cash for mine when it happened, the company was bought and moved to private ownership so no option of shares in new company
The answer is: it depends. Your shares will come with certain rights and obligations attached, which you should have been given in writing when you started buying into the programme.
It’s likely your shares will be subject to drag along rights, which means when the majority shareholder agreed to sell, they can force you to sell your shares too. Usually though that’s subject to the buyer agreeing to buy your shares at the same price per share as they are paying for the rest of the company. But this stuff varies so much from case to case that it’s impossible to do anything but wildly speculate.
Bit rubbish your employer didn’t tell you what would happen at the same time they told you about the buy-out to be honest, but you should ask them the question directly (and you could ask for the answer to be sent in writing to all employee share scheme participants).