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In a LBO structure, the acquirer has created a 100% subsidiary SPV to finance the transaction

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In a LBO structure, the acquirer has created a 100% subsidiary SPV to finance the transaction. The SPV issues bonds to the shareholders of the target company to acquire 100% stake of the target. The bonds  are secured against the assets of the target company. The bonds are proposed to be listed so that they   provide liquidity to the bondholders. If at a later date, the SPV is merged with the target company:

(a) The bondholders become shareholders in the merged entity

(b) The bonds will rank as sub-ordinate debt in the merged entity

(c) The bondholders will receive shares from the acquirer in lieu of the bonds.

(d) The acquirer can redeem the bonds by issue of its own shares

(e) The merged entity will become the subsidiary of the acquirer.

(f) The bonds will be delisted from the market

(g) The merged entity will cancel the bonds against shares held by the acquirer