[repomies69]

He should just have asked for all-cash transaction. I think it is fair. If they don't want to sell the company stock and buy the company with cash, or at least make an offer, then there is likelihood that there is some kind of fraud going on.

[fshbbdssbbgdd]

Easy to say in hindsight, but using stock to pay for a merger is common. Most companies are not carrying a big chunk of their value in cash (it’s not capital-efficient). Therefore buying anything sizable for cash will require the combined company to take on debt. So a stock-for-stock merger can result in a combined company that has a safer balance sheet. If the acquiree believes the merger is a good idea, they might consider owning stock in the merged entity to be a good thing. If nobody is offering them a competitive offer in cash, they don’t have much leverage to ask for it anyway. Even if you value the stock offer with some discount for risk, it can still be attractive.

[Retric]

It need not be a pure debt transaction, the combined company can sell stock to the public rather than the shareholders of the old company who may suddenly feel the need to liquidate.