What happens to SP if takeover fails?

[somebodyhere]

Hi,
What usually happens to share price if takeover bid fails?
For example with Orica ($33.90 now), if it fails, will it most likely go back to $28.00, or hover somewhere around $33.00?
Also the same with Qantas. With Qantas, it's been trading above $5 for 5 months. If the takeover suddenly fails, how likely is it to go back to $4.40?

Thanks for any information.

 

[Crafty]

Your guess is as good as mine mate...

 

[Omninewbie]

It depends. It normally falls back a bit, but not necesarilly to the pre-bid price as investors might expect a second bid to emerge once the company is put into play. Coles is a perfect example.

 

[shinobi346]

Not everyone buys because they want it bought out. It could stay higher due to the board's recommendation report making people aware the company is more valuable than its price leading up to the takeover annoucement.

 

[sleeper88]

It depends. It normally falls back a bit, but not necesarilly to the pre-bid price as investors might expect a second bid to emerge once the company is put into play. Coles is a perfect example.

One of the best examples is MTN.

 

[somebodyhere]

When did the coles bid fall apart? 16 April 2007?

And for MTN, are you talking about the drop on 18 April?

Pardon my ignorance... havent been following them too closely

 

[sleeper88]

Well mtn is a different kettle of fish..

butterfingers announces takeover
6/072006: http://www.marathonresources.com.au/pdf/060706_TakeOverOffer.pdf
SP goes from 55c to 76c

Those idiots continued to extend their offer, while mtn continued to rise

9/03/2007: http://www.marathonresources.com.au/pdf/070309_BidIncrease.pdf
SP goes from $3.30 to $3.76

So as you can see, it depends on the situation. Not all shares fall when a takeover fails, although in this case, this t/o offer seems to be ongoing.

It's also important to note that mtn is severely undervalued (refer to mtn thread), so this many also be a factor in this situation

 

[nizar]

What do you mean by fails?
You mean the bid is pulled?
Or like not enough shares were bought by the predator so no compulsory takeover was made??

Well, Not too sure about the bluechip companies.
But OMC bid failed - and while OMC certainly didnt run, it never fell.

PDN initial bid for SMM failed. SMM never went down.

TYC just kept rejecting and the takeover price kept going higher and higher.

MTN. Another example.

 

[somebodyhere]

PDN bid got rejected, didnt it?
but PDN still wanted to get SMM and was prepared to offer a higher price

What i meant was if PDN was not prepared to offer a higher price and SMM shareholders are not willing to accept it at the current price (or not enough of them are willing)

 

[ozeb]

This should probably be a new post but what happens if the take over is successful but you have not accepted the offer. What happens to your share then? and the price of your share??

 

[Bazmate]

If the takeover succeeds then the remaining shares are compulsorily aquired. so you get the takeover price for them anyway.... no choice.

That's how I understand the qantas case anyway, once they get 90%, sorry 70% of shares then they have the right to take everyones shares. I assume other's would be similar or same.

I just wish they'd hurry up and get it over with.... qantas that is.

Baz

 

[bvbfan]

Compulsory acquisition is part of the Corporations Law and is set at 90% acceptance. Companies can't take over your shares unless they get this level of acceptance from shareholders.

The bidder can set an amount like 70% that APA have done for Qantas, which they need to achieve for the holders who accept the offer to get proceeds of the takeover.
So as I understand it, if APA only get 65% they would not have to proceed with the bid.