What is an open offer?
When a company A acquires a majority stake in company B, it is required to provide an opportunity to the existing shareholders of company B to sell their shares. This is referred to as an open offer. In India, an open offer is triggered when a company buys a majority or more than 15% stake in a listed company. The acquirer has to make an open offer to buy at least an additional 26% stake in the company. It is seen as an exit route for the minority shareholders in the event of a new management taking over.
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