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Exact(21)
That is good for existing shareholders.
The lower the price, the more dilution will be produced for existing shareholders.
Analyst Christopher Bamberry at Peel Hunt said: With only limited value for existing shareholders, Mouchel remains a sell.
While the deal was sweet for Mr. Bonderman, it eroded the value for existing shareholders, enraging them.
That's unless Walgreen used stock, which would then present an issue of potential dilution for existing shareholders.
Were Siebel to do that, it would cause an enormous dilution for existing shareholders, and it would devastate earnings-per-share calculations if the stock recovered even slightly.
Similar(39)
Rather, it is "to decouple liquidity from exit" and to focus less on "external market conditions" — that is, to reduce any pressure for an exit from existing shareholders, by reducing their stake in the company, and bringing in others who perhaps have a different approach.
Alitalia's management is seeking an injection of at least 100 million euros from existing shareholders in exchange for new shares, as well as a syndicated shareholder loan of 55 million euros that would be convertible into shares.
The bank issued the new stock with an option for the existing shareholders, including the Russian state, to buy them at a discount of about 10 percent to their market price.
Melrose, a London-based firm that specializes in acquiring underperforming manufacturing businesses, said any buyout would be financed through a combination of new debt and a rights issue for its existing shareholders.
By contrast, if the investors overestimate the value of the firm, the leaders will then try to issue new shares; source of profit for the existing shareholders.
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