You're provided the information that a company plans to buy a target in an all-cash transaction. Does that phrasing typically imply that the cash will come from taking on debt? Or could it as well mean issuing stock in the market and using the cash proceeds as a consideration?
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If someone said they were doing an all-cash transaction I would assume that the acquirer would pay for it by cash they already had in their accounts.
It is very rare that the acquirer takes on debt before it has bought a company. It works similar to buying a house. You get a credit facility from a bank, which is an agreement saying that you intend to buy a house with 40% equity (savings) and 60% debt (the loan). You only lend the money when you have bought the house, ie. signed the papers. If you lose the bidding/auction, you don't take up the loan.
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