Vendor placing - An arrangement in which the vendor (seller) of a business who receives shares in the acquiring company as part of the deal immediately sells them on to an institutional investor.The point of this is that if the vendor sold the shares on the open market it would depress the share price, which would be bad both for the vendor and for the company. By selling a large block to an institution the price remains stable.The vendor gets what he really wants (cash), the acquiring company is able to pay for its acquisition the way it wants (shares) and the institutional investor gets shares in a company that it likes at a price that will invariably be below the market price.
Vendor placing : an arrangement in which the vendor (seller) of a business who receives shares in the acquiring company as part of the deal immediately sells them on to an institutional investor.the point of this is that if the vendor sold the shares on the open market it would depress the share price, which would be bad both for the vendor and for the company. by selling a large block to an institution the price remains stable.the vendor gets what he really wants (cash), the acquiring company is able to pay for its acquisition the way it wants (shares) and the institutional investor gets shares in a company that it likes at a price that will invariably be below the market price.
Vendor placing