On 1 July 2015, Monageng Limited concluded an agreement to purchase 75% of the ordinary shares in Selongo Limited.The terms of the purchase agreement include, among other things, the following • Monageng Limited will settle for the 75% of the ordinary shares by paying cash of R200 000 in addition to issuing 100000 of its own 10% preference shares to the owners of the 75% ordinary shares on 30 September 2015. The price ofthe10% preference shares on 30 September 2015 was R2.50 each. • Monageng Limited will only be able to appoint its directors to the board of Selongo Limited on 1 August 2015 after theyear end date of Selongo Limited which is on 31 July 2015. All the ordinary shares of Selongo Limited are entitled to voteat the company’s AGM but preference shares are not entitled to vote. Which of the following statements are true? (i) Monageng Limited is the acquiree (ii) Selongo Limited is the acquiree (iii) Monageng Limited is the acquirer (iv) Selongo Limited is the acquirer Select one: a. (i) and (iv) only b. (i), (ii) and (iii) only c. (ii) and (iii) only d. (iii) and (iv) only
On 1 July 2015, Monageng Limited concluded an agreement to purchase 75% of the ordinary shares in Selongo Limited.The terms of the purchase agreement include, among other things, the following
• Monageng Limited will settle for the 75% of the ordinary shares by paying cash of R200 000 in addition to issuing 100000 of its own 10%
• Monageng Limited will only be able to appoint its directors to the board of Selongo Limited on 1 August 2015 after theyear end date of Selongo Limited which is on 31 July 2015. All the ordinary shares of Selongo Limited are entitled to voteat the company’s AGM but preference shares are not entitled to vote.
Which of the following statements are true?
(i) Monageng Limited is the acquiree
(ii) Selongo Limited is the acquiree
(iii) Monageng Limited is the acquirer
(iv) Selongo Limited is the acquirer
Select one:
a.
(i) and (iv) only
b.
(i), (ii) and (iii) only
c.
(ii) and (iii) only
d.
(iii) and (iv) only
Purchase agreement is defined as a legal contract or document in which all the specifications of the purchase or acquisition are noted. This document includes in-depth details and the signatures of the associated parties.
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