What principle governs the offer to security holders during a take-over bid?

• A. Offering the highest possible price
• B. Providing identical consideration to all security holders
• C. Ensuring the quickest transaction possible
• D. Guaranteeing shareholder satisfaction

Answer: (B)

The principle that governs the offer to security holders during a take-over bid is providing identical consideration to all security holders. This is crucial for maintaining fairness and integrity in the take-over process. The regulation stipulates that all security holders should receive the same treatment in terms of the terms and conditions of the bid. This ensures there is no favoritism or discrimination among different holders of securities, which could lead to legal and ethical issues.

By providing identical consideration, the bidding party upholds the principle of fairness, promoting trust in the market. This principle is essential to protect minority shareholders from being disadvantaged and to ensure that the take-over bid is transparent and equitable. It aligns with the overarching regulatory framework, which aims to ensure that all participants in the market have a level playing field during any corporate actions, especially significant events like take-over bids.

The other options do not align with the fundamental regulatory principles of equity and fairness required in such scenarios.