merger and acquistion 2

Bidding Strategy

In the case for the acquisition of Kathmandu Holdings Ltd by Super Retail Group, it is evident that both the organizations and their shareholders need to come into consensus towards making a buyout. It is due to this reason that Friendly takeover is preferred over Hostile takeover.

A Friendly Takeover (FT) likewise referred to as an acquisition takes place when the procuring organization goes ahead to inform the objective organization's top managerial staff that it intends to buy a controlling interest. The directorate at that point votes on the buyout being proposed.

On the off chance that the board accepts the stock buy would profit the current investors, they vote for the deal. The obtaining organization at that point assumes responsibility for the objective organization's tasks and might decide to stay with the objective's directorate set up.

In FT, both Management and Shareholders are in concession to the two sides of the arrangement.

Motivation for the Strategy

The motivation behind the selection of this strategy is that it is less costly as an organization can offer cash or even offer their own shares. This widens the scope of the deal. The company which is an acquirer have an option of offering a conversion of a share or go ahead to process cash transaction. In case one of the offers does not meet the demands, there is an option of utilizing both cash and share offers.