Takeover Bid

A takeover bid is a formal public offer made by an acquirer — a company, individual, or investor group — to purchase a controlling or substantial stake in a target company by buying shares directly from the target's existing shareholders at a specified price, typically at a premium to the prevailing market price. Takeover bids can be friendly (supported by the target's board) or hostile (opposed by the target's board and management). In India, SEBI's Substantial Acquisition of Shares and Takeovers Regulations, 2011 (Takeover Code) govern all public open offers — requiring any acquirer who crosses 25% voting rights to make a mandatory open offer for at least 26% of the total share capital at a price not less than the highest price paid in the preceding 26 weeks. The open offer process includes a formal public announcement, an offer document filed with SEBI, and a specified acceptance period during which shareholders can tender their shares. Takeover bids are among the most significant corporate events for Indian equity investors — triggering sharp price appreciation in target company shares and significant strategic implications for the acquiring company.