UK Shares as purchase consideration

[Mr Didot]

We are struggling to account for transaction where Company A offers a portion of its shares to acquire 100% of the shares of Company C, a subsidiary of Company B. Companies A and B are not in the same group and all companies are private English companies limited by shares.

Can this be done as a share for share exchange? Can the shares of Company A once transferred to Company B as the fair value consideration for Company C be distributed to the shareholders of B?

Any thoughts would be helpful. Thank you.

 

[kirby]

Can this be done as a share for share exchange?
Depends.
If Co A and Co C each have 1,000,000 shares outstanding then a share of A has a value of 10GBP while a share of C has a value of 3 GBP. Maybe that is worth it to you? Point is you need more info. Like what is the per share fair value for each company ? And best would be to find the character in your company who arranged the purchase and ask them the terms of the deal meaning how they priced this in term of shares to be given.

Can the shares of Company A once transferred to Company B as the fair value consideration for Company C be distributed to the shareholders of B?
That is a legal question, not an accounting question. I'm in the US and cannot touch legal questions.