TAKEOVER Index Definition of Takeover Why company do takeover of another company? When Company do takeover of another company? Which companies can be takeover? Purpose of Takeover Type of Takeovera. Friendly Takeoverb. Hostile Takeover Advantage of Takeover Disadvantage of Takeover Procedure of Takeover
Definition of Takeover A takeover bid is an offer to purchase enough share of acompany to overtake the current majority shareholder. Takeover implies acquisition of control of a Companywhich is already registered through the purchase orexchange of shares. Takeover takes place usually by acquisition or purchasefrom the shareholders of a company their shares at aspecified price to the extent of at least controlling interest inorder to gain control of the company.
Why company do takeover of another company? if the smaller company have proven their profitability for seeking finance to grow their products which have high demand may attract the attention for an acquisition be avenue for larger acquiring companies to grow their company Small companies may become a takeover target if they fill a niche in the market that the bidder operates within.
When Company do takeover of another company? When company has a good market value and want to become bigger company, then companies try to purchase or included another company to itself company.
Which companies can be takeover? Any private company having good share and market value can be takeover of small company.
Purpose of Takeover Takeover mains purpose to make bigger or larger company from a small Company.
Types of Takeover Friendly Takeover Hostile Takeover
Friendly Takeover When a bidding company attempts to buy the majority shares without informing the board of directors first, this is considered a hostile takeover.
Hostile Takeover When the board rejects the friendly takeover offer, the bidder may choose to continue pursuing shareholders without the input of the board of directors.
Advantage of Takeover To Increased sales and revenue, increased market share and economies of scale.
Disadvantage of Takeover Job cuts as a result of a takeover is a disadvantage to the employee and reduced competition and choice for consumers.
Procedure of Takeover A company may acquire the shares of a unlisted company through what is called acquisition under Section 395 of the Companies Act, 1956. where the shares of the company are widely held by the general public, it involves the process as set out in the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, as amended in 2002, 2004 and 2006. The term ‘Takeover’ has not been defined under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.