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    Hi all, just curious. Who is it at the target company that approves a takeover and righs issues in a company - the board or the shareholders (by a resolution)?

    If its the board, then it seems unfair as the current shareholders might get diluted even though it may be against their wishes!


    If you're talking about public companies, the shareholders are the limited liability owners of the firm. In the event of a takeover or rights issue, it's the shareholders that make the decision, by a majority vote. In the event of a rights issue, the shareholders have the right to refuse to take up new shares. Does that answer your question?

    Board puts it to shareholders, though depending on how its structured can need as little as 50% + 1 share. So in most cases there'll be a minority who are opposed to it but have no choice (is a bit more complicated than that; 50% vote on a t/o for eg means the acquiring co gets control, but is left with some minority shareholders).

    For a rights issue, if you don't want to take up the rights, you'd normally get a payment from the sale of the nil-paids.
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