The question asked here is technically incorrect. This merger is triangular in nature; TGS shares will not be transferred to TGSNewco, but TGS will own TGSNewco 100%, and TGSNewco will be merged with PGS. In return, PGS shareholders will receive shares in the parent company, TGS. Therefore, existing TGS shares will remain unchanged, only new shares will be inssued in TGS.

The full merger plan is as follows:
(a) PGS is dissolved;
(b) PGS’ assets, rights, and obligations are transferred to TGS NewCo;
(c) TGS NewCo issues the Merger Receivable to TGS;
(d) the share capital of TGS is increased, and the Merger Shares are issued to the shareholders of PGS;
(e) the dividend compensation pursuant to Clause 6.1 is paid to the shareholders of PGS; and
(f) the merger is completed with continuity for tax purposes pursuant to Chapter 11 of the Tax Act.

Regarding the response from Finanstilsynet, it is correct that in Norway, naked short selling is not allowed, and therefore, all shorts we currently observe are lent by someone.
They will be covered at some point in the future, and it is not mandatory to cover them before the merger, specifically not for short in TGS.
For shorts in PGS, they must be covered before the merger, as the lender will ask the borrower to deliver back the PGS shares.