Open offer

When company A acquires a significant stake in company B, it is required to provide an opportunity to the existing shareholders of company B to sell their shares. This is referred to as an open offer. In India, an open offer is triggered when the acquirer buys a 25% or higher stake. The acquiring company is required to make an open offer for at least 26% additional shares, at a price not below the average price of the last 26 weeks. This provides an exit route for the minority shareholders in the event of a new management taking over.

Answered on 2022-07-01