Toehold purchase

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Toehold purchase

Often used in risk arbitrage. Accumulation by an acquirer of less than 5% of the shares of a target company. Once 5% is acquired, the acquirer must file with the SEC and other agencies to explain its intentions and notify the acquiree. See: Rule 13d.

Toehold Purchase

A purchase of less than 5% of the stock of a publicly-traded company. This is called a toehold purchase because one is not required to register and explain one's purchase to the SEC until one meets the 5% threshold. This allows one to begin the process of a potential hostile takeover by accumulating stock quietly, though one eventually would have to disclose one's intent.

toehold purchase

The purchase of less than 5% of the outstanding common shares of a target company before establishing a much larger stake. A toehold purchase allows a party to buy stock in a company without filing a notice with the SEC and with the target company.

Toehold purchase.

A toehold purchase is one in which an individual investor or investment firm caps holdings in a potential target company at less than 5% of the company's outstanding stock.

Presumably that's because once an investor has acquired 5% or more of the stock, the investor must notify the company, the market where the company is listed, and the Securities and Exchange Commission (SEC). That notification must explain the next steps the investor intends to take, such as a possible takeover bid.

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Unfortunately, Young's other attempts to gain a toehold in the U.
The narrow-opening, welded-mesh construction is designed to prevent a fingerhold or toehold and the use of cutting tools.
Drawing on research at leading universities, the Joyce Foundation reveals in the report that employment-based policies adopted by many states - especially in economic good times - have helped some families get a toehold on the economic ladder.
FIRST Minister Jack McConnell yesterday launched a campaign to stop far-right extremists getting a toehold in the Scottish Parliament.
In the UK it's very difficult to establish a toehold for all those worthy schemes to bring architecture to the teenies in our schools.
The proprietary study used various "fields" to categorize bids, including quantum of deal consideration, quantum of break fee, size of break fee as a percentage of deal consideration, whether the deal was shopped, whether a white knight was involved, premium to market, whether the bid was full or partial, whether the bidder had a toehold position and whether the bidder was a U.
Because those groups are not defined clearly enough, it could lead to abuses that would again jeopardize the opportunity for African Americans and minorities to gain a greater toehold in America's airwaves," Sutton said.
WITH LUXURY condos and dot-coms consuming New York's rehearsal and performance spaces, The New 42nd Street Studios in Times Square offer the performing arts an Internet economy toehold.
Chai first gained a toehold in this country back in the 1960s in--where else?
Unlike earlier biofungicides, the new coating has a kickback effect that stops fungi already having a toehold on the fruit.
Union members have even gained a toehold in the meat department of a Jacksonville, Texas, Wal-Mart, where the United Food and Commercial Workers International Union was voted in by a 7 to 3 majority.
1) When collaboration such as technology partnerships (Doz, 1988) and strategic alliances (McClenahen, 1987; Wachtler, 1988) occurs between large and small firms, it is common for the larger firm to buy and hold a block of stock in the smaller firm (the toehold target).