The Deadlines That Come Before Your Company’s Deal Closes

Tuesday I said this letter would cover the deadlines that can come due before a company’s deal closes. Here they are. It closes the short series on what a deal does to your money.

A cash deal gets announced, and then nothing seems to happen. The stock usually trades a little below the deal price. People keep working. Weeks go by, sometimes months. It feels like a waiting room.

It isn’t. The company reports the signed deal to the SEC within four business days, and the merger agreement is usually filed with it. That agreement already says what happens to your shares, your RSUs, your options and your ESPP. Many people never read it. I’d read it first, and then I’d put these dates on a calendar.

The trading window. Your company’s insider trading policy doesn’t end when the deal is announced. It runs until the deal closes. If you own shares and want to sell before then, your next open window may be the last one you get. Selling early usually means taking a little less than the deal price. Holding means waiting for the full price, and carrying the chance the deal closes late or not at all. Both can make sense. Only one of them has a date on it.

The last ESPP purchase. If you buy shares through an employee stock purchase plan, find the part of the agreement about it. In Dayforce’s sale to Thoma Bravo, no new offering periods started, the current one ended with a final purchase no later than five business days before closing, and then the plan ended. Shares bought that close to a deal are usually sold into it almost at once. Remember that when you get to the tax part.

The vote, or the tender offer. Typically shareholders vote on the deal after a proxy statement, and the meeting has a date. Some buyers make a tender offer instead, and a tender offer is a countdown. The SEC’s rules keep one open at least 20 business days. Since April 2026 the SEC allows as few as 10 when, among other conditions, the offer comes under a signed merger agreement, is for all of the shares and pays only cash at a fixed price. Ten business days is about two weeks. If you’ve never read a merger agreement, that isn’t much time to start.

Retention and severance. Some deals come with retention bonuses for the people the buyer wants to keep, and severance terms for the people it doesn’t. Each one usually has a date inside it. Stay until a certain day. Sign by a certain day. Know which dates are yours before you make any other plans.

The tax year. The closing date decides which tax year the cash lands in. For U.S. taxes, a deal that closes in December and one that slips to January are different years, and the same money can sit in a different bracket. Cash for RSUs, and for the gap on nonqualified options, is pay. Your employer withholds on it. For federal income tax, employers can use a flat 22%, and must use 37% on the part above $1 million in a year. If your bracket is higher, the rest is owed with your return, and a big payout can call for estimated payments before then. That’s a deadline too, and don’t count on anyone at the company to remind you of it.

The holding periods you can’t rush. ESPP shares and shares from incentive stock options have their own clocks, more than two years from the grant and more than one year from the purchase or exercise. Shares cashed out in the deal before then count as a disqualifying disposition, which changes how much of the payment is ordinary income. The deal doesn’t wait for your holding period. You can’t move that date. You can know it.

If you’re senior. Officers, anyone who owns more than 1% of the company, and the highest paid people have one more. Section 280G. When the payments tied to the deal reach three times your average taxable pay from the company over the five years before it, the part above one times that average faces a 20% excise tax on top of income tax. I covered it in last Friday’s letter, The 20% Golden Parachute Tax and Who It Applies To. If it could reach you, the time to find out is before the close, not on your return.

Then the deal closes, the cash lands, and the biggest decision of all has no deadline at all. Where does the money go? If a big part of what you owned was one company’s stock for years, now it’s cash in an account. Nobody sends a memo about that one. It’s the question I’d spend the most time on, and it’s the one that usually gets the least.

Twelve questions cover all of this. I put them on one page, with what four cash deals announced in 2025 did with each kind of award, so you can hold your own agreement up against them. bfawealth.com/guides/cash-acquisition

If you’re in the U.S. and your company has a deal on the table, book a Checkup. It’s free and takes fifteen minutes. bfawealth.com/checkup

Tuesday, a different clock. The one that starts when a company files to go public.

Talk Tuesday.

Mateo

P.S. If a coworker is waiting on the same close, send them this letter.