What is a takeover bid?
The term takeover bid is used when a company makes an offer to acquire majority shares in another company whose shares are publicly traded. It is not unusual for management, the board of directors or a group of shareholders to be unreceptive to the idea of selling, in which case the process is called a hostile takeover.
A takeover bid is an offer to purchase enough shares of a company to overtake the current majority shareholder. There are a variety of different takeover bid strategies, including friendly, hostile, and two-tier. High profile takeover offers almost always result in a temporary flux in the stock market, which may go up or down depending on public and market opinion of the takeover bid. In a friendly takeover, the bidding company or individuals inform the board of directors of the target company. Depending on the offer made, the directors then recommend to stockholders whether to accept or reject the takeover bid. In small companies, it is easier to approve a friendly takeover, as the board of directors often makes up the majority shareholders. However, if the board feels it is not in the interest of the company to accept the terms, they may reject the takeover bid, which sets the stage for a hostile takeover of the target company. Takeover bids may begin hostile or become hostile, depen
A takeover bid allows one company to take over another company. Certain pre-requisites apply before this is possible. The “Take Over” menu shows competitor companies in each Licence and their credit ratings – highlighted in red or yellow (lower console window). Takeover Pre-requisites and Rules: •Target Company’s Credit Rating must be BBB or worse •Target Comp capacity and Bidder Comp capacity must be equal (same upsize) •Bidder’s Credit Rating must be equal to or better than Target’s Credit Rating •Bidding Company needs a min. Market Share of 1/Num of Competitors – (advised in pop up when bidding) •Takeover Fee = Licence Value * 10% * Licence Rating * (5 / Target Holding’s # comp) •No takeovers possible in level 1 (neither active nor passive) •No takeovers possible at 32 x •1 x capacity companies cannot be targeted for takeovers •Holdings with 1 company cannot be targeted for takeovers Also: If player is in turn 100+ he is not protected from being taken over at any rating. If player i
How Does it Work? Categories: Main Page Last Modified: February 04, 2007 23:30 Article ID: 10045 A takeover bid allows one company to take over another company. Certain pre-requisites apply before this is possible. “Ranking” menu shows competitor companies in each Licence and their credit ratings – highlighted in red or yellow (lower console window). Companies with red Credit Ratings can be taken over provided the pre-requisites listed below are met. Clicking on a company name in this window brings up the Holding page and clicking on the credit rating beside a company opens the takeover bid option. When a bid is successful: • The targeted company is removed from the target Holding’s account • The Licence of the successful bidding company is upsized • The Bidding company receives the targeted company’s history of sales (market share) • The targeted holding enters 10 turns protected mode unless on turn 100+ Takeover Pre-requisites and Rules: Target Company’s Credit Rating must be BBB or
Related Questions
- In case of merger or takeover, in case if the registered Foreign Institutional Investor loses its existence, then can the SEBI FII registration be transferred to the surviving entity?
- In case of merger or takeover, in case the registered Foreign Institutional Investor loses its existence, then can the SEBI FII registration be transferred to the surviving entity?
- What is a takeover bid?
