Takeover Defense Strategies

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Definition: Takeover Defense Strategies

While facing a hostile takeover through a hostile bid, the management of the targeted company acts to protect their independence or to ensure that the hostile bidder is pressured to sweeten their bid further. Often, the main purpose is to make the acquisition more costly or time consuming and in such way making the targeted company less attractive due to the rise in cost which follows.

It can be done through several different techniques commonly called defence strategies, shark repellent tactics or antitakeover measures.

These strategies can be divided in to proactive and reactive strategies, depending on when a company decides to adapt it.

Some of the proactive strategies:

Golden Parachutes, staggered board, super majority, fair price, poison pill

Some of the reactive strategies:

White Knight & White Squire, Greenmail, Crown jewel, litigation

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