Financial engineering : Question 12
What are the respective advantages of a public purchase offer and a public exchange offer? Which would be better for the target company and which for the initiator of the takeover?

Briefly, a share exchange offer is generally a more friendly way of linking up than a takeover through the purchase of the target's shares, but this is not always the case (Vodafone/Manesmann, Sanofi/Aventis). The acquirer does not have to pay out cash and take out debt simultaneously, and in most countries, the shareholder of a target that accepts the offer, does not have to pay capital gains tax.

For more information, see chapter 44 of the Vernimmen.