What are the potential tax implications for shareholders who accept the cash offer versus those who might reject it?

Tax considerations are a key part of the “fair‑to‑shareholders” test in a cash‑out‑of‑M&A.

If a MLNK shareholder accepts the $20 cash per share the transaction is treated as a sale of the stock. The cash receipt becomes the shareholder’s realized amount and is compared with the shareholder’s tax‑basis in the MLNK shares. The difference is a capital‑gain or loss that is taxed at the rate that applies to the holding period: a short‑term rate (ordinary income) if the shares have been held for ≤ 12 months, or the long‑term capital‑gain rate (generally 0 %–20 % federally, plus any state tax) if held longer. Because the offer is in cash, there is no opportunity to defer the gain by rolling the proceeds into a new investment; the tax liability is triggered immediately on the deal‑closing date.

A shareholder who rejects the offer (or fails to tender) retains the MLNK shares, which will continue to trade on the NYSE (or be delisted if the merger proceeds). The tax impact is then postponed until the shares are eventually sold—whether in a later secondary market transaction, a future tender, or a spin‑off that might be received as a non‑cash consideration (e.g., shares of the acquiring entity). In that case, the tax event is generally deferred until the new securities are disposed of, and the original MLNK basis is carried over (or adjusted) under the “continuity‑of‑interest” rules. However, shareholders who hold the post‑sale stock may still be exposed to future capital‑gain tax on any appreciation, and they must track the new cost‑basis and holding period for those shares.

Actionable insight: When weighing the $20 cash offer, investors should calculate the after‑tax value of the deal by applying their own marginal capital‑gain rate (short‑ or long‑term) to the expected gain. If the after‑tax cash proceeds are substantially lower than the projected upside of staying invested in the combined entity, the offer may still be attractive. Conversely, shareholders with a high‑cost basis (or those in a high‑tax bracket) might find the cash tender more appealing because the tax bill is known and immediate, whereas rejecting the offer leaves the tax outcome uncertain and potentially larger if the post‑sale stock rallies. A quick “tax‑adjusted net‑present‑value” comparison can help determine whether the cash tender truly maximizes shareholder value after taxes.