Learn in the textbookM&A and Corporate Restructuring
DefinitionA TOB (Take-Over Bid, 株式公開買付け) is a way of buying shares in which the buyer first publicly announces the number of shares, the price, the period and other terms, then buys off-market, outside the stock exchange, from shareholders who accept.
ExplanationThe "public" (公開) in the Japanese name 株式公開買付け refers to announcing the terms, while the trades themselves take place outside the stock exchange. The offer price is usually set above the market price, and each shareholder decides whether to accept.
AnalogyLike posting a notice that says "We buy this item at this price until this date" and buying directly from anyone who brings one in.
Memory hookTake-Over means taking control, and Bid means an offered price. You name your price first and step forward in the open.