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What is a dawn raid?

Dawn raid

Despite its name, it has nothing to do with the police. A dawn raid is the purchase of a significant number of shares first thing in the morning before the markets open.

Where have you heard about dawn raids?

Dawn raids are sometimes featured in the financial news. For example, in 2016 private equity group HabourVest carried out a dawn raid on its UK rival SVG Capital. Its broker bought up 8.5% of the company, taking its control to over 50%.

What you need to know about dawn raids.

Dawn raids are often carried out as part of a takeover bid, with the aim of avoiding the higher costs that a formal takeover bid would incur.

This can happen when companies trade their shares at wide discounts to their net assets. Meaning it's easier to take control of the company by buying up the majority of their shares, than it is to buy the company formally.

Find out more about dawn raids.

Read more about dawn raids in takeover bids and hostile takeovers.

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