Premium Raid

外汇网2021-06-19 13:46:18 121

An attempt by a corporate raider or acquiring company to procure a large block of shares in a target company, by offering its shareholders a significant pmium over the current market value of their shares. This tactic is most likely to be used in a hostile takeover situation, where the acquiring company pfers to bypass the target company's management and take its offer directly to the shareholders.

The ultimate objective of a pmium raid for a corporate raider or acquirer is to gain effective control of the target company. In certain cases, a pmium raid can prove to be quite costly for the acquiring company. This may occur if the pmium offered to the target company's shareholders is too high (a situation that may arise if the target is in a hot sector), or if the acquirer is forced into a bidding war with another bidder or a white knight who has the support of the target company's management.

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