Question

There are other methods of SEO, outline the difference between a placing and an open offer of shares.

Answer 1

Answer

Introduction of SEO

SEO is an acronym that stands for search engine optimization, which is the process of optimizing your website to get organic, or un-paid, traffic from the search engine results page. In order to do this, search engines will scan, or crawl, different websites to better understand what the site is about.

Methods of SEO

Effective SEO methods to Drive Organic Traffic

• Improve user experience across your entire site.
• Optimize for voice search.
• Focus on topic clusters instead of keywords.
• Go into detail – but only when it's relevant.
• Conquer video with YouTube SEO.
• Build a variety of backlinks.
• Get a grip over technical optimization.

The difference between a placing and an open offer of shares

Introduction of a Placing

A placing (called a placement in the US) is the issue of new securities, which are sold directly to holders, usually institutions. Unlike a rights issue a placing of shares is not an offer to existing shareholders; simply to any suitable buyers who can be found.

A company joins our markets without raising any capital. However, the opportunities for boosting your company's profile and visibility are limited. Placing. A placing usually involves offering your company's shares to a selected base of institutional investors..

The advantage of a placing is that it is a cheap and simple method of raising money. It does not require the paper work and administrative overhead that a rights issue or an open offer does. The shares (or other securities) are simply issued to a small number of new shareholders who are willing to buy substantial amounts of the new shares.

Placings can be unfair to existing shareholders by allowing new shareholders to buy shares at a discount to the market price. There are regulatory restrictions on placings that are designed to protect the rights of existing shareholders. However, they are a cheap, fast and simple way of raising money.

Intoduction of Open Offer

An open offer is a secondary market offering, similar to a rights issue. In an open offer, a shareholder is allowed to purchase stock at a price that is lower than the current market price. The purpose of such an offer is to raise cash for the company efficiently.

For making an open offer, an acquirer is required to make a public announcement, which should include offer price, number of shares to be acquired from the public, purpose of acquisition, identity of the acquirer, future plans, details about target company, procedure of accepting the shares and the time period for this

An open offer differs from a rights issue (offering) in that investors are unable to sell the rights that come with their purchases to other parties. In a traditional rights issue, the trading of transferable rights, connected with shares, occurs on the exchange that currently lists the issuer's common stock (e.g., NYSE or Nasdaq). These can also be listed over the counter (OTC). Some investors see a secondary market offering as a harbinger of bad news as it causes stock dilution. Also, the open offer could signal that the company stock is currently overvalued.

Exemption

SEBI grants exemption to govt from making open offer to UBI shareholders. Capital markets regulator Sebi on Thursday exempted the government from making open offer to shareholders of Union Bank of India following a proposed equity infusion that would increase its promoter stake in the lender by 12.48 per cent

Conclusion

The Placing and Open Offer requires Shareholder approval:

(i) Of the terms of the Placing and Open Offer and to direct the Directors to implement the Placing and Open Offer.

(ii) To grant the Directors authority to allot and issue the New Ordinary Shares; and (iii) to allot the New Ordinary Shares at the Issue Price.