What is a takeover bid?

A takeover bid is an offer by an acquiring company or third party to purchase a sizeable portion of equity of another company. The price offered is usually at a premium to the market price to entice investors to participate. The takeover bid will only proceed if the acquiring firm receives a certain number of shareholders who want to participate in the bid. If the takeover bid is successful, the investor tenders their shares. This means that they sell their …

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