A few years ago, I had the chance to purchase some shares in the company as I was being laid off. Not a large amount so I figured why not do it. Now the company is seems to have found a buyer, and the company wants to buy all the shares back before the deal closes. They were bought for 10NT, and the old company is offering 25NT. Thoughts, experiences to share? My emotions are getting the best of me because this was a really painful time for me.
What does the share purchase agreement say?
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How long ago was that? Did the company grow in this period? What’s the percentage you hold?
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I have to read the share purchase agreement. It’s been a few years and it’s written in Chinese.
I own a minuscule amount so I don’t know why they need to buy back my shares. One of my former colleagues said that the big boss says that if we don’t sell, it will go to a judge and we’ll only get half…
The timeline is fishy. They are only giving us a few days to decide, and no one has yet to contact me directly. I’m just wondering if there is a reason why a private company must buy back all the stock before merging or being sold.
When buying a company, we typically like things to be as simple as possible. As little debt as possible, as few debtors as possible. And also as few shareholders, too, because this means less notifications that have to be sent out, less documentation to generate for everyone involved.
If you know the buyer personally, you might check (1) what price they really are planning to buy at, (2) if they are willing to buy your shares directly.
If your stake is very small and you do not want to make this a significant effort on your part, you might decide that the NT$ 25 per share is fair or fair enough. If you choose to go it alone and challenge the big boss’s plans, remember that you could be complicating a transaction that otherwise would be straight-forward.
If you have reason to believe that NT$ 25 is not a fair price and it should be worth more than this, and your small stake can support it, then workout what the higher price should be first (i.e., exactly why you think it should be NT$ X per share and not NT$ 25) and consult a professional accountant and a corporate lawyer for advice. Remember that doing these steps will take time and money - so work that into your calculation whether this is a rabbit hole you truly want to jump into.
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My advice: Take the money, say thank you, and wish everyone well! You made out like a bandit, your stake is really small, and there is a bad memory for you.
Of course, how likely is the company going to be a $1B company ? It could happen… you know. I wouldn’t like to be the guy who bought pizza with a whole bitcoin!
After finding out they want me to sign over the stock with a contingency contract on their deal, I think I’ll take my time to understand this better. Why do they need to “borrow” my stock?
Get a lawyer mate, at least then you’ll have an incentive of providing all the information 'cos you’re paying money, rather than firing off random questions and providing only limited information.
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