DEFINITION of Assented Stock
Assented stock is securities owned by a shareholder who has agreed to a takeover. Assented stock may be traded in a different market than non-assented stock, which represent shares of shareholders who are holding out on the takeover.
Shareholders approach the prospect of a takeover with one primary goal: getting the best deal for the shares that they own. The acquiring company typically offers to purchase a controlling interest of stock at a premium to the current trading price. Shareholders who agree to the terms of the takeover bid are said to hold assented shares, and typically receive a higher price than shareholders who do not agree to the takeover bid. Shareholders who do not agree are said to hold non-assented stock.
BREAKING DOWN Assented Stock
Acquiring companies may take a two-tier approach when making a takeover bid. In order to obtain a controlling interest in the company, the acquirer will offer a higher price to enough shareholders as to have the voting rights required to takeover. The shareholders that accept this highest price hold assented shares. Shareholders that hold non-assented shares will rely on company management employing poison pill defenses, such as a back-end plan, to dilute the voting power that assented stock will provide to the acquiring company.
Assented shares may be traded on a separate market from non-assented shares, with the acquiring company setting up the market so that shareholders who have accepted the takeover share price can continue trading their shares. This separate market is referred to as an assented share trading facility. The reason for setting this facility up is that the value of the assented share is set at the price that the acquiring company has indicated that it will pay, which may be higher than what non-assented shares would obtain on the open market.