Takeover As A Form Of Corporate Restructuring In Nigeria.
A takeover is the acquisition of one firm by another; the target company is the one being acquired, and the buyer is typically referred to as a bidder or acquirer. Similar to a merger, a takeover differs in that the companies involved are not on an equal footing. A predator corporation and a prey organization are typically present in a takeover. An acquisition is another name for a takeover.
Under the Nigerian law a takeover occurs according to Section 131 of the Investment And Securities Act where any person;
(a) acquires shares that, when combined with shares held or acquired by parties acting in concert with him, carry 30% or more (or any lower or higher threshold as may be prescribed by the Commission from time to time) of the voting rights of a company, whether through a single transaction or through a series of transactions over time; or
(b) together with persons acting in concert with him, holds not less than 30% but not
more than 50 per cent (or a lower or higher threshold as may be prescribed by the
Commission from time to time) of the voting rights and such person or any person
acting in concert with him, acquires additional shares which increase his percentage
of the voting rights, such person shall make a take over offer to the holder of any
class of equity share capital in which such person or any person acting in concert
with him holds shares.
In accordance with Sections 445 (1) (a) & (b) and 448 (2) of the Securities and Exchange Commission Rules, the takeover offer must be made to the target company’s shareholders through an agent. This agent needs to be a licensed capital market operator. Additionally, The Commission must also be satisfied that the bid has complied with the Act and these rules and regulations before registering it.
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