Swap and share fair

Date: 3/25/2025 1:33:39 PM - 1/20/2025 9:15:00 AM 
Venue: BNR Training College (PTEC), Gulzarbag Station Rd, B.N.R Teacher's Quarter, Tripolia, Patna, Bihar, India 

A fair share swap, also known as a stock swap, is a transaction where a company exchanges its shares for another company's shares during an acquisition. The goal is to ensure that shareholders in both companies own a fair share of the new company. 

How it works

1. Valuation: Each company is valued to determine a fair swap ratio. 
2. Swap ratio: The parties agree on the swap ratio, which determines how many shares each shareholder will receive. 
3. Exchange: The acquiring company offers its shares to the target company's shareholders. 
4. New company: The shareholders of both companies own shares in the new company. 

Why it's used

• Mergers and acquisitions: A company can use a share swap to acquire another company without paying cash. 
• Stock options: An employee can exercise their stock options and receive shares. 

What to consider

• The acquiring company may offer a premium to make the deal more appealing. 
• The target company may use a stock swap to resist the takeover. 
• The agreement may include restrictions on when the new shareholders can sell their shares.