Public Offers of Acquisition

These public offers of acquisition take place when a society is interested in controlling another company or in acquiring a significant participation of their capital. In this case, the first company may offer the shareholders of the second the possibility of buying their shares, usually at a higher price quotation than that of the market.

This higher price is justified because the society that purchases expects to better the results of the acquired company and because in the stock exchange quotations the value of the fusion is not included. Public offers of acquisition are regulated on all the countries, in order to protect the shareholders of companies whose shares are being bought by another. For it, when you wish to make a public offer of acquisition you must communicate the action to all the interested parties; the of the company to be acquired, its shareholders and the stock exchange market.

Sometimes, a public offer of acquisition has negative results when, the company to be acquired is against this acquisition. For it, the company that feels that it is being attacked tries to rise the quotations of their shares with a higher distribution of dividends or other similar measures. If they can rise enough their quotation as to make their shareholders to underestimate the fusion, the public offer of acquisition may fail.

To avoid for a public offer of acquisition to stand. There are several measures, the following are the most used:

before the formulation of a public offer of acquisition you can put a determined number of conditions to accede to the management council, as to ask for a minimum of years experience. Also, you can distribute subscription rights to the present shareholders that could be exercised when a public offer of acquisition is produced which gives them the possibility to purchase shares at a lower price.

to counter-attack by putting in motion another public offer of acquisition against the company that is making the public offer against your company.

To acquire assets that are not wanted by the company that is doing the public offer against your company or to buy the asset that they are interested in. This can make them loose the interest for carrying along the public offer.

To put in motion law or administrative demands to slow down the process of acquisition.

To re-buy shares on the market at a higher price than that offered by the company that is carrying out the public offer of acquisition.