In an event when an acquirer takes over the control and functionality of the target company, it is termed as Takeover. When an acquirer obtains substantial proportion of shares or voting rights of the target company, it results into substantial attainment of shares.
A Target company is a listed company whose shares are listed on any stock exchange and whose shares or voting rights are being acquired and whose control is being taken over by the acquirer.
An Acquirer means any individual or company or any other legal entity which aims to acquire substantial number of shares or voting rights of the target company and agrees to acquire control over such target company.
A public announcement is made in the newspapers by the acquirer disclosing his objective to acquire shares of the target company from existing shareholders by means of an open offer. Such disclosures include the offer price, number of shares to be acquired from the public, identity of acquirer, purpose of acquisition, future plans, any change in control over the target company, the procedure to be followed by acquirer in accepting the shares tendered by the shareholders and the period within which all the official procedures relating to the offer would be completed.
The objective of public announcement is to ensure that the shareholders of the target company are aware of an exit opportunity accessible by them.