The situation where one company makes an offer for some or all of the shares of another company. The offer to existing shareholders is usually pitched at a price well above the existing market price to persuade shareholders to accept the offer. Many investors select companies that may be ripe for a take-over and then wait. Some classic indications of a possible take-over: the company’s market price is well below its net value; it has recently cut or passed its dividend; and it has a large assessed tax loss that could be used by another company.

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