takeover

What helps determine the share price of a takeover target?

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News of Northern Star Resources (ASX:NST) acquiring De Grey (ASX:DEG)  caused the stock De Grey to jump 29% on the day. In this article we discuss why the acquired company jumps in price when there is a takeover offer. When a company is being taken over (acquired), its stock price often increases due to several factors related to the terms and expectations of the acquisition. Here’s why this happens: Acquisition Premium: Typically, when one company acquires another, the acquiring company …

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What is a takeover bid?

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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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