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  5. KL: Hi team I made a sizable gain of KL (non registered account) over the long term, now that there is a chance of merging with AEM if I decided to let the stock of KL merge with AEM; do I have to pay ... [Kirkland Lake Gold Ltd.]
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Q: Hi team
I made a sizable gain of KL (non registered account) over the long term, now that there is a chance of merging with AEM
if I decided to let the stock of KL merge with AEM; do I have to pay capital gains?

as there is very little premium of AEM to take over the KL, is there a good chance
that the shareholders of KL would reject the take over? thanks
Michael

Asked by Michael on October 13, 2021
5i Research Answer:

The merger makes some sense as a combination of equals and to get a bigger company with a lower overall cost of capital. There will always be unhappy shareholders in deals, but in this case we think a larger premium was warranted, and there is a chance it gets rejected. It is trading at a 1% premium to the value of the offer right now. As a merger of two Canadian companies there should be no tax consequences until shares are sold.