Open Offer

Open Offer – An open offer is a kind of an open advertisement that a bidder makes to takeover a target company. This is followed by a letter sent to the shareholders asking them to buy the shares of the target company at a particular price.

This price is generally quite above the market price of the shares of the company. In this way, the bidder can easily acquire a large number of shares of the target company and hold a controlling interest on same which makes way for a merger to happen.

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This open offer must include details like offer price, motive of acquisition, number of shares that need to be acquired from the public, future plans and identity of the acquirer. Further, the bidder is supposed to pay a consideration to all the shareholders within 15 days from the date of closing of the offer. In case of delays, the bidder will have to pay interest on the amount due.

Edited and Updated 08th March 2014

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