my doubt is ranbaxy is going to merge with sun pharma…for every 10 shares of ranbaxy they will get 8 shares of sun pharma…if some one has 12 shares of ranbaxy …then he need to sell the remaining 2 shares in the open market or there is any other solution??
Usually such schemes work on ‘absolute’ basis. For example if Sun-Ranbaxy deal is ‘absolute’ then for every 10 shares or multiples of 10 shares you will receive 8 shares or multiple of 8 shares.
However in other case the spillover shares will be ‘cash settled’. So in this case the 2 additional shares over and above the 10 shares will be cash settled.
You need to check in the merger document if the scheme is absolute or cash settled.