Replies to post #9615 on SiNtx Technologies Inc (SINT)

[boston745]

Nasdaq requires $4.00 share price for a reverse merger, but what Zalicus did was a 10:1 increasing its pps to $11.40. The reason for that was reduce outstanding shares so that when Zalicus merged with Epirus, Zalicus shareholders only owned 19% of the new company.

Lets say a merger between Amedica & Zimmer resulted in us owning 6% of the new co and Zimmer shareholders owning 94%. That means our share count would need to be reduced 4:1 effectively making our OS ~12mil shares. In this scenario our shares, at $125 pps would be worth $1.5B.

Another possible factor is, the combined synergy of the 2 companies could immediately increase the value of the PPS. So while Zimmer shareholders owned say 94%, the pps could be 137.5 for the new entity representing a 10% premium for current Zimmer holders.

This sort of merger i doubt we see ownership of less than 5% of the new company; would likely trade under Zimmers current ticker.

[boston745]

A major incentive for the timely completion of takeovers arises from bidder competition. Extensive research suggests that mergers could be an important factor in the creation and sustainability of competitive advantage (Trautwein, 1990). Some of the sources of competitive advantage in mergers are synergies, others – economies of scope and scale (Betton et al. 2008). Horizontal mergers could also strengthen market power, while vertical mergers could reduce ‘hold-up’ production costs (Grossman and Hart, 1986; Hart and Moore, 1988).