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Investing & Financing: Corporate Buyouts
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IHOP buys Applebees (APPB) for $25.50/share. APPB is currently at 24.88. This is 2.49% difference. You could buy some APPB shares and wait until the deal goes through for an almost guaranteed 2.49% return.
This is my question: how do corporate buyouts work for shareholders? Is there a specific date that you must be a shareholder on (similar to dividends) to have your shares turned into cash?
Also, does anyone know how this works for taxes? Are you charged at the typical 15% long term capital gains tax, or the 35% short term gains because you hold the stock less than a year? You aren't selling, but the stock is converted to cash (or shares of other company).
Thanks!
No Debt Plan -- Living Debt Free -
Anyone?
No Debt Plan -- Living Debt Free -
I have absolutely no idea buddy :(
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A quick call to your broker would probably sort this out for you.
There usually is a specific date that the exchange (cash or shares) will happen on, but it can take a long time to actually happen. Some deals are dependent on Government approval etc.
My guess would that you're seeing a return on your investment (I know not by choice) if you've held for less than 1 year you'll be taxed at the higher rate.
Mubs
Mubashar Iqbal | I Build Stuff -
Anyone think this might make for a decent niche blog? A listing of all the current corporate buyouts, mergers, and acquisitions ... updated news on them, etc.?
No Debt Plan -- Living Debt Free -
Might work, but that info is always readily available from other sources. Maybe your opinon on those mergers would make for a better blog.
I am a Young Go Getter!
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