Hi,
assuming there is an all-stock deal, ie public deal and lets say it is an equity value of 20bn incl premium, and the target has 5bn in net debt, is the 5bn net debt simply added to the buyer's net debt OR is the buyer taking on debt to pay the 5bn down / refi it?
thanks
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It could be either. You could simply add the net debt if you're assuming a rollover / refi or you would assume a CoC on the Target's debt which would require additional cash (ie. reduction in buyer cash / target net cash). Neither has any impact on the Target equity value per se.
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