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Can I say hostile takeovers seldom happen on PLC?

Can I say hostile takeovers seldom happen on PLC?

Postby kachibibi » Sat Sep 13, 2014 8:58 am

Usually there are strict rules to forbid shareholders of a private limited company to sell shares to external people, which is different from what can happen for a listed company. So, it is impossible for an external company to suddenly buy all shares from a private limited company and extinguish it?
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Re: Can I say hostile takeovers seldom happen on PLC?

Postby miner » Sat Sep 13, 2014 1:43 pm

PLC stands for Public Limited Company, NOT Private Limited Company.
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Re: Can I say hostile takeovers seldom happen on PLC?

Postby kachibibi » Sat Sep 13, 2014 3:31 pm

Yes, I talk about "private limited companies". Just I don't have space for the heading.
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Re: Can I say hostile takeovers seldom happen on PLC?

Postby dls » Sat Sep 13, 2014 7:58 pm

Usually there are strict rules to forbid shareholders of a private limited company to sell shares to external people,


Those rules - which are not universal - are not strict. They usually require agreement from other members in some way. If terefore the members agree to sell gtheir shares, and that others hould also, then why not.

Once the shares have been sold the sellers have no interest in or control of what the buyer does with them.
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Re: Can I say hostile takeovers seldom happen on PLC?

Postby kachibibi » Sun Sep 14, 2014 1:30 pm

So based on what you say, the kind of takeover for private limited companies is rarely a hostile/sudden one, but a lenient acquisition because it is based on members' consent (as long as other members agree to sell their shares to external people).
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Re: Can I say hostile takeovers seldom happen on PLC?

Postby dls » Sun Sep 14, 2014 3:02 pm

The inherent character of a share is that it is transferable. It is only limited in that character to the extent that the articles of association or a shareholder agreement so specify.
It would be wrong to assume that such limitations are the same from company to company. They may in fact be so, but such characteristics are often changed as a company develops.
One very typical variation might be that a shareholder wanting to sell must first offer the shares for purchase by his co-holders. If they do not come up with the money, typically the shareholder may be free to sell them on.
This one of the differences between a limited company and a partnership. In principle, a partnership is a much closer, more personal relationship. A shareholding carries an instant distancing, tempered by arrangement artificially created by the articles.
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Re: Can I say hostile takeovers seldom happen on PLC?

Postby atticus » Sun Sep 14, 2014 8:13 pm

Any takeover, hostile or not, has to be agreed by the shareholders. Private companies tend to have very few shareholders.
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Re: Can I say hostile takeovers seldom happen on PLC?

Postby dls » Sun Sep 14, 2014 8:39 pm

Some plc's are also quoted companies, bringing in yet another layer of regulation. Some systems of regulation may require someone who acquires a certain proportion of shares to go on and offer for the rest.

Also, the meaning of 'hostile' takeover should not be assumed to be simple.
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