Can Retail Shareholders do Hostile Acquisition of Public Companies?

| March 17, 2020 | 0 Comments

First of all, any person who has the financial muscles to get 50% of a small company is not a small investor. You are talking about HNI at the lowest price. Maybe he or she is. High-profile corporate personality.

The acquisition of most of the companies listed on the stock exchange is not straightforward. When the shareholding percentage of the individual cross-amount (I think the level is close to 5% or more). They have to inform the stock market about this. At that point, everyone except most innocent market participants knows that someone is buying shares. Of companies that have problems in the open market.

If the board says that a hostile coup is being planned, they can take all steps to prevent it, including direct negotiations with the people behind the lobby to find strategic investors, lawsuits or stock repurchases.

This is not the end. If the ‘retail’ investors assume that they still receive their shares after other criteria, they will have to use the law to make open proposals for stocks. At this point, I think we can safely conclude that the opportunity Of the small investors that were made until the hearing was so cold that we could assume that it was 0.

However, assuming that this investor manages to buy 50.1% of the company, yes, he will be strong as a board member and will be in a position to influence important decisions and strategic direction of the company.

What you need to consider is that buying a 50% stake in a listed company does not give absolute power. If the minority shareholders can prove that that person is making a decision that does not help the organization, they will receive a legal intervention. In this situation, the court can and, for the most part, compel most stakeholders to reduce their stake in order to restore the balance.

Finally, you have to wonder why small-scale investors are worried about hard work and impossible. If they are dissatisfied with the company’s performance or direction, and if there isn’t a massively relevant person, the easier option for individual investors is selling, holding and investing elsewhere.

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Anil is a tech blogger at WideFide. To know more about me or if you want to follow my latest updates, Follow me on twitter @TheOnlyAnil or Join me @ Facebook