What Amazon's Reduced iRobot Acquisition Price Means for Investors

Amazon.com (NASDAQ: AMZN) still plans to acquire home robotics specialist (NASDAQ: IRBT) -- but the premium the online retail giant is willing to pay just fell significantly.

Earlier this week, shares of iRobot plunged after Amazon announced the two companies have agreed to amend the terms of their merger to reduce the price Amazon will pay -- specifically, to $51.75 per share from $61 per share previously.

If you're wondering why the price was lowered, look no further than iRobot's move to enter into a new $200 million financing facility to both pay off its existing debt and help fund its ongoing operations until the merger is completed. For Amazon, it's essentially a zero-sum game as the change in price per share largely reflects the planned increase in iRobot's net debt under this new financing facility.

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Source Fool.com