Bid

'Bid' - can simply mean offering to buy shares. It may also mean the highest price which you are prepared to pay for a given security at a particular time.

You'll also come across the term "bid price". This is the price at which a market-maker in the stockmarket is prepared to buy shares from existing holders. It will be below his offer price - the price at which he will sell.

These terms are also used to refer to the prices at which a fund management company will buy back/sell units in a unit trust or similar pooled investment.

'Bid' - in the context of a takeover bid means making an offer for the shares of another company. When one company seeks to take over another it makes a bid - an offer to buy at a stated price. A takeover bid must be a general offer to all the shareholders of the target company.

The price offered will be above the market price of the target company (being highly unlikely to succeed otherwise). City rules on takeovers stipulate a time-limit for acceptance of the bid.

See also: Moneyextra's Stockmarket Centre

See Also: Online share dealing service Stockmarket Centre

Last Updated: May 2007 © Moneyextra.com

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