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Simple English definitions for legal terms
takeover offer
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A quick definition of takeover offer:
A takeover offer is when someone wants to buy a company and they ask the people who own shares in that company if they want to sell their shares. The person who wants to buy the company usually offers to pay more money than the shares are worth, so the shareholders might be tempted to sell. This is called a tender offer. Sometimes the person who wants to buy the company offers to pay with cash instead of shares in another company. This is called a cash tender offer.
A more thorough explanation:
A takeover offer, also known as a tender offer, is a public offer made by a company to buy a minimum number of shares directly from the shareholders of another company at a fixed price. The offer is usually made at a premium over the market price in an attempt to gain control of the target company.
For example, if Company A wants to acquire Company B, it may make a takeover offer to the shareholders of Company B to buy their shares at a higher price than the current market value. If enough shareholders accept the offer, Company A can gain control of Company B.
There are different types of takeover offers, such as cash tender offers, where the bidder offers to pay cash for the target company's shares, and creeping tender offers, where the bidder gradually acquires shares over time.
Overall, a takeover offer is a strategy used by companies to gain control of another company and increase their market share and profitability.