A takeover is the purchase of a company (target) by another company (the bidder or acquirer). The target of a takeover must either be a company (corporation) or a sole proprietorship. The purpose of a takeover bid is to take control of the company concerned and its heritage.
An IPO is different from a merger. In a merger, the merged company disappears, whereas in a takeover, the company that has launched the takeover bid takes over the target company, but the individuality of each company is respected. Currently, when approached by a bidder, the power to decide the future of a company lies only with shareholders. The shareholders' of the target company then receive an amount in cash or cash equivalent to the price of the offer. These are most often hostile bids to encourage shareholders of the target company to tender their shares to the company initiator.
[...] To avoid this situation, Porsche launched a takeover bid that it knew in advance to be defective because of the market value and the minimum price imposed by law. The German law also provides another threshold, that the holdings of a company should not exceed 50%. Once this percentage reaches capital, Porsche will again launch a takeover bid. Consequences Porsche does not hold the entire capital due the failure of the bid. Indeed, with the 31% that the group owns, it has control of VW and may continue to increase its market share gradually without paying a considerable sum at once. [...]
[...] It is in contrast with the term “black knight”, which is used for a person, group or an organization that initiates a hostile take over. The “white knight” helps a business by purchasing it either when it is in the middle of a hostile takeover, or when the business is nearing bankruptcy or is already bankrupt. A white knight will generally not resort to any ruthless measures like replacing the staff, policies etc in comparison with a black knight. Instead, it will try and funnel money into the company to restore it. [...]
[...] Under German law, the Porsche group must now launch a takeover bid for the Volkswagen group. However, the takeover failed because Porsche offered a price below the market. This was a deliberate move intended to avoid a competitor taking a large stake in the company, or to stop hedge funds from dismantling the Volkswagen group. Porsche's move came after the European Union introduced the “Volkswagen and moved against the German law that protected Volkswagen from takeovers. Since September 2005, Porsche has decided to increase its share capital in Volkswagen with whom it shares several models. [...]
[...] The Porsche Volkswagen Takeover Background and description of the undertakings concerned Porsche Porsche AG, founded in 1931 by Ferdinand Porsche, is a manufacturer of sports cars. The company is headquartered in Zuffenhausen, a suburb of Stuttgart. This group is the most profitable car maker in history. The turnover during 2005-2006 showed 7.27 billion euros and the net profit reached 1.39 billion euros. The decision-making power is held by the Porsche and Piech families. They have: Half of the capital The voting shares in full The private and institutional shareholders split the remaining 50%. [...]
[...] There are different ways of defending companies from facing a takeover bid or exchange offer: a. Defending Pac-Man The principle of this defense is to make the takeover more expensive for the acquirer, by absorbing other companies or by subscribing to a capital increase. The target will be more expensive and more difficult to acquire because of the new shares issued. This strategy sometimes leads to the Poison pill strategy. According to investopedia poison pill strategy is a strategy used by corporations to discourage hostile takeovers. [...]
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