RE:RE:stupid question timeFact of the matter is that any company making a bid for the company would only be involved with the official outstanding shares of the company....If there are options then they might in all events pay them out as well,Debetures /Pref Shares all would be redeemed if they wanted or carried over to the new listed entity.
Now as for the shorts they will have to deliver to the purchasers of the shares they borrowed from and whatever the buyout price is....Take $12 for example and todays trading price if they shorted at $2,08 then they have to buy in the number of shares they are short of at the Take Over price losing the difference between $2,08 and $12 .....The big problem for them of course is that if there is dissention and a higher price is sort for the shares they could in the final analysis end up buying back the shorted shares over the take over price.
Hope you find that helpful