An offer made to the shareholders of a company by a person or organization to gain control of the company. If the company is quoted on the Stock Exchange, the bidder is expected to observe certain recommendations. There is a similarity with the highway code in that though the recommendations have no legal force they cannot be flouted with impunity.
If a person owns a certain proportion of the shares of the company, a minimum of 90 per cent, he can apply to the court for an order entitling him to purchase the shares he does not already hold at a price approved by the court. Similarly, the shareholders may insist that their shares are purchased.
Reference: The Penguin Business Dictionary, 3rd edt.