An advisor deals with a M&A
M&A experts on the trading floor of the New York Stock Exchange said Monday that they are considering using a different method of financing an adviser’s transaction in a M &C deal than is typically used in a deal that includes a loan.
In some cases, advisors are able to buy back their loans with cash, and in other cases, they can borrow money from the government, said James A. Zirkin, an analyst at Sanford C. Bernstein &.; Wolfe, who is based in Chicago.
The same process could happen with a stock option, he said, and the same would apply to an option on an advisor’s salary, a loan or a share of a company.
The process would not be as simple as an adviser buying back the loan and taking out a new loan.
Advisers usually pay interest and a fee on loans, but they can also buy back the underlying equity and sell that to a buyer.
The same method would not apply in a sale of a stock, said Zirkins, who has worked on M&ac deals.
In his view, the best way to ensure the best value for investors is to leverage the market’s ability to sell stock.
“We believe it’s the best strategy to leverage equity for those of us who need a lower interest rate,” he said.
Investors who want to buy an M&AC-linked option could find a way to use the option to purchase stock in a company with a similar size as the one that owns the underlying asset.
Investors could also consider an alternative financing approach, such as a loan backed by a stock that they own.
This can be more flexible than buying a stock outright and selling it at a later date, Zirokin said.For more: https://www.bloomberg.com/news/articles/2017-07-27/a-advisor-deals-with-a-mike-gop-deal-that-includes-a.html https://www,advisorsguide.com (source)