TOB

Corporate corporate actions are actively being carried out. What should I do if my shares are subject to TOB? This time, let's learn the basics you need to know as an individual investor.

TOBis an abbreviation for Take-Over Bid“Public tender offer”It refers to an enterprise that wishes to purchase specific shares directly from an unspecified number of shareholders.

・Securing management rights through stock acquisition

・Mergers and Acquisitions (M&A)

・Unlisted (MBO)

It is carried out for various purposes, etc.

Companies that want to carry out M&A (acquisitions/mergers) with specific companies will announce the implementation of TOB along with “price, period, and target number of shares to be acquired.” In TOB, we buy in bulk outside the market instead of normal market trading. If the number of shares acquired by TOB does not reach the target number, TOB itself will be cancelled.

Stock prices after the TOB announcement are affected by how high (cheap) the TOB price is compared to the market price.The difference between the TOB price and the closing price (market price) on the TOB announcement datePremiumIt is.

However, as an existing shareholder holding shares on the TOB side, there is a great possibility that the TOB price will fall below your own purchase price.

The TOB announcement is for the marketsurpriseFurthermore, it also provides investment opportunities for investors, and it is also a method for companies to reliably acquire the required number of shares.

There are two types of tender offers (TOB): friendly TOB and hostile TOB (it is common to choose friendly TOB).

・Friendly TOB: It is carried out with the consent of the target company's management team, and is used to make group companies subsidiaries, etc.discount TOBHere's where it happens.

・Hostile TOB: It is mainly implemented against rival companies, etc. for the purpose of management control without prior agreement. The purchase price often exceeds the market price, and it may also have a big impact on stock prices.

Friendly TOB is usually carried out by agreement between companies, and hostile TOB is aimed at seizing management rights. If it also becomes a hostile TOB to control (take over) the other company, stock prices may fluctuate greatly due to uncertainty, such as target companies resisting or takeover proposals appearing from other companies.

The points that individual investors should know about TOB vary depending on whether TOB has the target stocks.

[When holding target stocks]

・Participate in TOB and sell at TOB price

・Sell on the market for instant cashing

・Determine future potential by continuing to hold

There is an option called

I will explain each one.

You can open an account with the securities company acting as your agent, go through the TOB participation procedure, and sell the shares you hold at the TOB price presented.

However, keep in mind that if an upper limit is set on the number of shares to be purchased by the acquirer company, there is a possibility that they will not be able to sell even if it responds to TOB when the upper limit is reached.

If listing continues even after the TOB announcement, it is possible to sell immediately at the securities company you own. In that case, be sure to check your purchase unit price and the trading status (board) and TOB purchase price of TOB stocks carefully. Since it can be sold without waiting for the TOB participation procedure, it can be quickly converted into cash.

It is also possible to continue holding without selling or participating in TOB even after TOB is announced. However, please note that there are also stocks that will be delisted after TOB ends.

Immediately after the TOB was announced, to the TOB priceSend SayaBeing done (the difference between TOB purchase price and market price narrows) is common. Since orders flood in, stocks become a scramble, and participating in price increases between market prices and TOB prices after the announcement is basically a “quick game.” The level of difficulty may be slightly higher for ordinary individual investors.

If it can be purchased at the market after the announcement, it will participate in TOB, and it is also possible to sell it on the market.

I explained at the beginning of the article that TOB is usually offered at a “premium” price that is higher than the market price. However, there are also cases where discount TOB is offered at a lower price than the market price.

The purpose of discount TOB is to ensure that only the required number of shares is acquired and to secure shares at low prices from specific major shareholders. By setting the discount price, general shareholders will not respond to TOB, and it is thought that it will be easier to purchase the target number of shares from specific major shareholders.

Discount TOB is mainly used for corporate restructuring and stock holdings dissolution. In the unlikely event that the listing is delisted after TOB, there is a possibility that the shares you hold will be forcibly purchased at the discounted TOB price, so be careful。

Individual investors will need to look back at the proposed TOB price, confirm the merits and losses due to the sale of holdings, and then make appropriate investment decisions. Considering the background of the implementation of TOB and the future potential of the company is also important in investment decisions.

TOB (Tender Offer) is when a company directly buys specific shares from an unspecified number of shareholders. TOB is implemented for purposes such as securing management rights, M&A, and delisting. As for TOB prices, a premium price higher than the market price is generally set, but discount TOB may also be offered. Individual investors are required to make investment decisions based on the optimal solution for each option when shares held are subject to TOB.