Assented Stock
What Is Assented Stock?
Assented stock comprises of protections owned by a shareholder who has agreed to a takeover bid for a company. Assented stock, otherwise known as assented shares, might be traded in an unexpected market in comparison to non-assented stock, which addresses shares of shareholders who are holding out on the takeover.
Shareholders approach the prospect of a takeover with one primary goal: getting the best deal for the shares that they own. The obtaining company regularly offers to purchase a controlling interest of stock at a premium to its current trading price. Shareholders who consent to the terms of the takeover bid are said to hold assented shares, and commonly receive a higher price than shareholders who don't consent to the takeover bid. Shareholders who disagree are said to hold non-assented stock.
Figuring out Assented Stock
Procuring companies might adopt a two-tier strategy while making a takeover bid. A two-tier bid, otherwise called a two-tiered tender offer, happens while the getting company will pay a premium far in excess of the target's current market price to persuade its shareholders to sell their shares.
The acquirer will offer a higher price to an adequate number of shareholders to pile up the number of voting rights required to get a controlling interest in the company. The shareholders who acknowledge this highest price hold assented shares. (It's called a "two-tiered offer" on the grounds that the acquirer deals with the target in the initial tier, however at that point makes another, lower offer for additional shares through the second tier that is completed sometime not too far off.)
Typically, the price offered for assented stock is greater than for non-assented stock, mirroring the acquirer's longing to gain control.
Shareholders who own non-assented shares — who aren't consenting to the acquisition — might be depending on company management utilizing poison pill protections, for example, a back-end plan, to weaken the voting power that assented stock will give to the securing company.
Special Considerations
Frequently, assented stock becomes untradeable: It is stored in a separate account, held by a third party, until the acquisition goes through.
Notwithstanding, some of the time assented shares might be traded on a separate market from non-assented shares, with the gaining company setting up the market so shareholders who have accepted the takeover share price can keep trading their shares. This separate market, alluded to as an assented share trading facility, is laid out so the value of the assented shares is set at the price that the obtaining company has indicated that it will pay, which might be higher than the amount non-assented shares would bring on the open market.
If, in the interim and before the takeover occurs, the assented shareholder sells their stock, the buyer committs consequently to accepting the acquirer's bid.
Features
- Assented stock might be set in a third-party account, or they might be accessible for trading in an assented share trading facility — separate from the open market where non-assented shares trade.
- During the takeover exchanges, various prices might be quoted for assented and non-assented stock; the assented stock's price is normally higher.
- Shares owned by stockholders who don't consent to the takeover and are dismissing the eventual acquirer's offer.
- Assented stock alludes to shares an agreed owned by a stockholder to a takeover of the company addressed by the stock.
