If you or a fund you invest in own shares in a company that is involved in a takeover, your shares are likely to change in value as a result of the takeover. How they will change isn't always clear.

If You Own Shares in the Target Company

More often than not, shares in a company that is being taken over will rise in value - partly because the company bidding will have to offer a premium for each share they purchase in order to get shareholder agreement.

This means they will buy each share for more than its current market price - an instant profit if you're lucky!

If You Own Shares in the Bidding Company

Shares in the company doing the bidding can go up or down, depending on a range of factors.

If market analysts think the company being bought is a 'good fit' for the bidding company, its shares could rise. On the other hand, if the markets think that the company being purchased is not a good fit or is overpriced, shares in the acquiring company can easily fall.