Take under is a process of acquiring or, under taking and purchasing a public company at a price per share that is less than the current market price of the shares of the target company. Take under is a process that takes place when the target company is financial weak or having poor profits turn over from the last few years and it is going in overall loss rather than generating profit or revenue. Other conditions that may result in a take under process can be the target company facing such problems that are going to threat its overall viability and may result in vanishing of the target company. The process of take under is almost similar to that of the takeover except there is a difference between the prices of the shares offered to the shareholders of the target company. In the process of takeover the shareholder of the target company receives the price and premium of the share that is higher than the market price of the shares of the target company. However in the process of take under the shareholder receives a price of share that is less than the market price of the shares of the target company.
Some target companies reject the take under offer as they consider it as a low ball attempt to take over the company. However a number of companies accept the take under offer as they are going through a number of financial challenges. Challenges being faced by the target company include financial strain, steep erosion in the market legal problems and related issues.
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