What are Withdrawal Rights in the context of a take-over bid?

What are Withdrawal Rights in the context of a take-over bid?

• A. Rights that allow shareholders to withdraw their bids at any time
• B. Conditions whereby security holders can reclaim deposited shares
• C. Options for investors to sell shares before a bid is completed
• D. Rights to refuse a sell offer at market value

Answer: (B)

Withdrawal Rights refer specifically to the conditions that allow security holders to reclaim their deposited shares during a take-over bid. In the context of a take-over, shareholders may deposit their shares in acceptance of the bid, but circumstances can change, prompting them to reconsider their decision. Withdrawal Rights ensure that they have the legally recognized ability to retract their acceptance and reclaim their shares before the bid has been finalized. This mechanism provides a layer of protection for investors, allowing them to respond to new information or changes in market conditions that could affect the attractiveness of the offer.

The other choices do not accurately capture the essence of Withdrawal Rights. The first option suggests that shareholders can withdraw bids at any time, which is not entirely accurate since there are specific conditions and timelines that govern such withdrawals. The third option implies a selling action before a bid is completed, but Withdrawal Rights focus on the rescinding of acceptance rather than initiating new transactions. Lastly, the fourth option mentions refusing a sell offer at market value, which is unrelated to the concept of reclaiming shares after depositing them in response to a take-over bid.