Hostile Takeover

A Takeover occurs when an acquiring entity takes control of a Company. A Hostile Takeover could occur when the Senior Management opposes the action, rejecting the offer of the Acquirer.

A Takeover could be Hostile when the action of the Acquirer is against the objectives or desires of the Management of the Target Company. Under a Hostile Takeover all defenses, such as a Poison Pill or a Golden Parachute, could be employed to prevent the takeover offer being successful, in general they are not positive for shareholders. The Acquirer does have the right to go directly to the Company’s Shareholders to plead their case, or they can look to replace the current Senior Management, to allow the Takeover to go ahead. The two commonly used Hostile Takeover strategies are to make a Tender Offer or engage in a Proxy Vote. The Board and the Senior Management of the Target Company are obliged to present all viable Takeover offers to the Shareholders. A viable Takeover offer is one that benefits Shareholders.