In the commercial field, the acts or operations that can take place are very diverse. One of these operations, which is going to be developed in this article, is the Takeover bid (OPA).
Definition of Public Offer of Acquisition
A takeover bid, or Takeover bid, can be defined as a procedure by virtue of which the purchase of part or all of the shares of a publicly traded company. This type of procedure occurs in the stock markets and the acquirer can be a person or a company.
Through these public offerings for the acquisition of securities, it is easier for the acquirer get large action sets in a single instant (at the price agreed between the parties). This, through other ordinary actions that can occur in the stock market, would not occur in the same way, since an uninterrupted demand for a company's securities would significantly increase the price of its shares.
How does an OPA work?
As mentioned in the previous section, the takeover bids of a company They are carried out at a single moment, with an associated price agreed by the parties involved.
With respect to transaction price, this must be higher than the market value of the shares at the time it is carried out. In this way, it is achieved that the shareholders of the acquired company attend the offer and sell their shares. Note that this difference between the listed value of the securities and the price at which they are purchased is usually around 10% or 20%.
It should be noted that there are situations in which the entities that undertake these businesses are obliged to acquire all the shares of the acquired entity, that is, launch a takeover bid for the 100% of the company's securities. These situations are the ones that will be mentioned below:
- Take the control of the acquired company.
- Delisting: This assumption refers to the cases in which the companies that are bought make the decision to stop listing on the stock market.
- capital reduction: Because this type of action constitutes alterations to the bylaws of the companies whose shares are purchased, all shareholders have the option to sell the shares under their ownership.
Obviously, within a takeover bid, shareholders of the opado company can, within a set period, dDecide whether they agree to enter into the operation or not. Once this term expires, depending on the decisions of the shareholders, it would be necessary to verify if the number of acceptances reaches the minimum. If the minimum is exceeded, the shares are sold, and if not, the negotiation can be cancelled.
Furthermore, it should be noted that in the public records of the National Securities Market Commission (CNMV), you can find documents with information on takeover bids, such as the Takeover bid brochure, the announcement of the takeover bid and the report of the board of directors of the takeover bid company.
Types of Takeover Bid
In addition to the mandatory takeover bids (those that require the purchasers to launch a takeover bid for all the shares), among which are the takeover bids and exclusion bids (also described above) there are other types, including the following:
- Competing takeover bid: Situations in which a natural person or company makes an offer for securities that are already the subject of a previous takeover bid (provided that the acceptance period for the latter has not yet expired).
- friendly takeover: These are takeover bids in which, basically, there is a deal between bidders and shareholders or the board of directors of the takeover entity.
- hostile takeover: As it is possible to deduce, in this case there is no agreement between the parties involved.
It is possible to find a multitude of actions within the stock markets. In this article, we wanted to focus on an operation that is used by well-known companies in our country (Orange and Jazztel, without going any further).
In addition, from the Alter Finance team, we encourage you to come to us if you require financial advice about the takeover bids.