Rollover Equity

Shares an existing owner exchanges for equity in the buyer’s acquisition vehicle instead of taking cash, at a value the offer document states. In a buyout it is a source of funds that is also a use, because the shares bought and the equity issued are the same money; it leaves the seller exposed to the deal through a geared structure; and its value at the offer price is the base against which the roller’s return is measured. Takeover rules require the rollover value per share to be no better than what other shareholders are paid.