A takeover happens when one firm obtains control of another. That can be friendly, with both boards agreeing, or hostile, when the buyer goes around management and appeals to shareholders. Payment may be cash, shares in the buyer, or a mix.
Key takeaways
- Control usually means holding enough voting shares to direct the target company’s board and strategy.
- Target shareholders may receive a premium over the recent market price, but deals can also fail or be revised.
- Regulators often set rules on how offers must be made and disclosed so minority shareholders are treated fairly.
- After a full takeover, the target may leave the public market if it is delisted.