DJ Biotage Acquires All Of Argonaut Technologies Business
03/18/2005 Dow Jones News Services (Copyright � 2005 Dow Jones & Company, Inc.)
Edited Press Release
STOCKHOLM (Dow Jones)--Swedish life science research company Biotage AB (BIOT-A.SK) Friday said it will acquire all of U.S. Argonaut Technologies Inc.'s (AGNT) business instead of only the reagents business, as was announced earlier.
The total acquisition price thus becomes SEK145 million which is paid in cash, the company said. Beside the reagents business Argonaut also has a process instrument business.
You bring up an interesting point. If the whole company is bought and investors receive the cash, then your first example is appropriate. However, sometimes companies do special distributions which may be entirely taxable (*). Such a taxable distribution that is not a dividend would decrease the basis of the shares for the purposes of later calculating capital gain / loss when those shares are finally sold or fully liquidated.
My understanding (which could be incorrect) is that this is part of a liquidation, so the payouts were taxed against shares' basis like capital gains.
* or sometimes they are 'return of capital' distributions which are not taxable, but instead *increase* the basis of the shares