If I own stock of one company and there is a purposed cash buyout from another company... what does this mean?

Question

Does the company that is buying the company I hold stock in normally offer a higher price than the stock is currently priced at?... or can the offer price actually be lower than the current stock price?

The purposal has been made public but the price hasn't yet been agreed upon....

Answer 1

A cash buyout is where the purchasing company will pay you cash for your stock as opposed to giving you shares in the combined company or maybe a combination of cash and stock.

The buying company normally offers more than the current price of a stock.  Not many people will be willing to sell their stock for less than what they can sell it for on the open market, so there's little point in making the offer.