offer? When one company agrees to buy another for cash, it usually offers more than the stock was trading at, so the current owners will say yes. That extra amount is called the takeover premium. Once a deal is announced, the stock tends to jump toward the offer price, but it often trades a little below it until the deal actually closes.
Here's a real example from this week. On Oct 29, ADT agreed to be bought by Thrive Holdings for $10.00 per share in cash. ADT says that's a 45.6% premium to its unaffected closing price of $6.87 on Oct 27, before word of the deal came out. ADT shares rose about 33% on Oct 29 and closed at $9.87, about 13 cents under the offer. The deal is expected to close in the first quarter of 2027, and it still needs approval from ADT's shareholders and U.S. antitrust regulators. ADT can also look for a better offer until Nov 28.
That small gap between the price and the offer is called the deal spread. It shows that buyers today are waiting months to get paid and taking the risk that the deal could fall apart, in which case the stock could drop back. A deal headline isn't a guarantee, and the spread is the market's way of pricing in time and risk. Got a question about mergers, buyouts or how deal news moves stocks? Ask below. There are no silly questions here.
Sources: ADT press release and SEC Form 8-K (Oct 29, 2026); Yahoo Finance and StockAnalysis ADT price history (Oct 29, 2026).
John Murray
A good habit with any deal headline is to ask who still has to approve it and how long the wait is, because that gap between price and offer is where the risk sits. If any of these terms are new, ask away here; basic questions are always welcome.
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