Hey giddyup was wondering what happens to the shareholders who...

First 40 Last

Share
Profile

Follow
virtuosa

209 Posts.

10

01/11/23

11:30

Post #: 70663097
Share

Originally posted by GiddyYup: ↑

@AUS0008 .......... You say "Agreed - takeover is not negotiable"

Can I ask what makes you think that? A takeover offer is 100% a negotiation. In fact the takeover offer is the formal process by which an entity engages with the owners of a public company to negotiate its purchase.

Here is the issue. A public company is owned by thousands of individual shareholders. Different holders will have different expectations and desired outcomes, time frames, tax positions and vested interests. The rules state that the takeoveror (bidder) needs to make a formal offer to all shareholders. Some may accept that offer and some may not. If they can't get enough people to accept the offer they have to either give up or increase their offer. This is repeated over and over until they get to 90% acceptance where they can use the law to apply for the right to force compulsory acquisition. Each new offer is part of the negotiation process, ie you reject the first offer and they may make a bigger offer. They never make their highest bid first.

As you can see the takeover process is in fact a structured negotiation specifically designed to allow the negotiation between one big entity and thousands of other entities. Its all a negotiation but due to the number of entities involved and cost of getting them all together its done like this. If you are a major shareholder its quite possible to have direct discussions about acceptable price with the bidder but if you only own 0.00000000001% then all you get is a nice letter to explain their offer(s).

Conclusion: A takeover is a negotiation.

PS. I went through this a few years back with a few other holders. We got 4 increased offers and were pushing for a 5th. The speculation by some about the ultimate price saw the SP go higher than my target price so I sold on market for a reasonable amount higher than the 4th takeover offer. The 5th offer never came and they went to compulsory acquisition. One holder took them to court and successfully argued that the final offer was insufficient. I don't know what happened after that as to the best of my knowledge he had less than 1% of the company and the bidder had 99% so at some later point I assume he got what he wanted. That was a great negotiation.

Expand

Hey giddyup was wondering what happens to the shareholders who only have the options in a takeover??

BIT Price at posting: 9.9¢ Sentiment: Buy Disclosure: Held
Upvote

0 Great analysis

Reply