What must occur before the bid period begins according to Takeover Code Rule 2?

Before the bid period begins, a firm announcement confirming a forthcoming formal offer is essential. This requirement, as outlined in Takeover Code Rule 2, ensures that all parties involved in the takeover process are informed about the intentions of the bidding company. It adds a layer of transparency and fairness to the acquisition process by mandating that the market and shareholders are made aware of the impending bid, allowing them to react accordingly.

This formal announcement serves to provide clarity and information that can impact stock prices and strategic decisions made by other potential bidders and shareholders. By having a definite announcement, it prevents any ambiguity about whether a formal offer might or might not happen, thereby stabilizing the market environment during a sensitive period related to corporate acquisitions.