When a company buys out a stock, and there is debt involved, does all of the buyout price flow to shareholders, or only all of it minus the debt? I ask because of the Paramount Global discussion. It was reported there was one bid by Apollo for $26 billion…current market cap is roughly $7 billion I think. Just for sake of simplicity, let’s round the bid up to $28 billion.
If the stock is trading at roughly $11, and the $28 billion bid was accepted, would that mean the stock would trade close to $44, theoretically? Or, does one have to subtract out debt, and thus it would be meaningfully less than $44?
I am assuming shareholders would not get the debt portion, but would get the portion related to cash…would that be correct? Which I suppose leads to another question: does market cap include cash levels?
Thanks in advance!