I’m a little confused, is there a rule of thumb of when both companies prefer a cash offer?
If it is a share transfer then the target company share holders are bearing some of the risk that the synergies will become realized In a cash transfer the acquiring company assumes all the risk for the synergies to come true. If the target company shareholders aren’t confident in the realization of the estimated synergies they will prefer a cash transaction (and if the acquiring company has doubts in the synergies they would prefer a share transaction).
when acquirer is reasonably assured of the synergy effect, while the target is not so sure. ( I hope ) Acquirer if it is sure of synergy, and goes with the stock offer - the higher price of stock due to synergy post merger is available to the target shareholders as well. So payout would be occurring for a longer time period. Whereas, if acquirer pays cash - it is a one time payout! Later when benefits of synergy happen - all payouts are reasonably assured for the acquirer. If target is not so sure of the synergy - it becomes a case of “take what’s available now” and run.