General idea
On certain occasions, companies require financing, so they offer savers the possibility of acquiring part of their company, how? By subscribing shares in the company.
Types of IPOs
There are different ways of subscribing shares, so we will look at them in more detail:
– Takeover bid (takeover bid). This takes place when a company or organisation wants to take control of another by acquiring shares at a higher price than the share price. In this way, it encourages all shareholders to sell because this body offers a higher price than with the sale of the share. There are several types of PTBs:
1. Friendly; when the takeover bid is accepted by the management of the target company. This board will be the majority shareholders.
2. Hostile; when the takeover bid is not accepted by the board. Here the small shareholder is favoured, as both will have to offer higher prices to improve the offer.
3. Competing; when another company interferes by improving the offer of the bidding company, taking into account, of course, that they have not signed the agreement yet.
4. Compulsory; when a company is, for example, bankrupt or delisted, there is no other option but to accept the best bid received by the bidding companies.
5. Voluntary; when the bidding company does not offer a specific price for the takeover bid, it can establish the conditions it deems appropriate.
– IPO (Public Offering for Subscription). This occurs when a company increases its capital and offers new shares, inviting new investors to join the company.
– IPO (Initial Public Offering). This occurs when one or more representative shareholders decide to sell their shares. It can be general (offered to the entire public) or restricted (offered to certain groups).
Again, it can take place in a listed company (already listed on the stock exchange) or an unlisted company (offering its shares to the public for the first time). In IPOs, the share capital of the company does not change, only the owners change.
They are usually carried out by young companies, which aim to raise capital to carry out projects through the IPO, achieving continuous financing.
It is also often the procedure used by public companies that are to be privatised.
