Hostile Takeover Bid

Hostile Takeover Bid

An attempt to take over a company without the approval of the company's board of directors. When vying for control of a publicly-traded firm, the acquirer attempting the hostile takeover may proceed to bypass board approval in one of two ways typically.

First, the acquirer may attempt to buy enough shares of the company in order to acquire a controlling interest in the firm. Second, the acquirer may instead try to persuade existing shareholders to vote in a new board which will accept the takeover offer.

It is often difficult to acquire a controlling interest in a publicly-traded firm. Such a bid requires a large amount of capital and a good strategy to avoid bidding up the price too high. There are two main tactics employed to acquire a controlling interest. First, the acquirer may make a tender offer to the company's shareholders, pledging to buy shares of the company for a set price above the prevailing market price. Alternatively, an acquirer may wish to accumulate shares by buying directly in the market. However, this buying may cause a sharp increase in the stock price.

In either case, the acquirer must pay a premium over the market price to gain control over the firm.


Investment dictionary. . 2012.

Игры ⚽ Поможем написать курсовую

Look at other dictionaries:

  • hostile takeover bid — /ˌhɒstaɪl teɪkəυvə bɪd/ noun a takeover where the board of the company do not recommend it to the shareholders and try to fight it …   Dictionary of banking and finance

  • Takeover Bid —    The initial offer by a predator company for another. The bid can be in cash, shares or a combination. Bids usually have a closing date for acceptance. The bid can be hostile (without the acceptance or cooperation of the target company), or… …   Financial and business terms

  • Takeover Bid — A type of corporate action in which an acquiring company makes an offer to the target company s shareholders to buy the target company s shares in order to gain control of the business. Takeover bids can either be friendly or hostile. Some… …   Investment dictionary

  • hostile — hos‧tile [ˈhɒstaɪl ǁ ˈhɑːstl, ˈhɑːstaɪl] adjective FINANCE a hostile bid or takeover is one in which a company tries to buy another company whose shareholder S do not want to sell: • They ve managed to fight off a hostile takeover bid. * * * …   Financial and business terms

  • hostile — hos·tile adj 1: having an intimidating, antagonistic, or offensive nature a hostile work environment 2 a: of or relating to an opposing party in a legal action a hostile claim b: adverse to the interests of a party to a legal action if the… …   Law dictionary

  • takeover — noun ADJECTIVE ▪ attempted, proposed ▪ hostile ▪ company, corporate ▪ communist, military …   Collocations dictionary

  • hostile — hos|tile [ˈhɔstaıl US ˈha:stl, ˈha:staıl] adj [Date: 1500 1600; : French; Origin: Latin hostilis, from hostis stranger, enemy ] 1.) angry and deliberately unfriendly towards someone and ready to argue with them ▪ Southampton fans gave their… …   Dictionary of contemporary English

  • hostile — hos|tile [ hastl ] adjective ** ▸ 1 unfriendly/threatening ▸ 2 opposing something ▸ 3 of/done by enemy in war ▸ 4 difficult/dangerous ▸ 5 in business 1. ) behaving in a very unfriendly or threatening way toward someone: The mayor found himself in …   Usage of the words and phrases in modern English

  • hostile */*/ — UK [ˈhɒstaɪl] / US [ˈhɑst(ə)l] adjective 1) behaving in a very unfriendly or threatening way towards someone The minister found himself in the middle of a hostile crowd. hostile to/towards: She was openly hostile to him. a hostile… …   English dictionary

  • takeover — [[t]te͟ɪkoʊvə(r)[/t]] ♦♦♦ takeovers 1) N COUNT A takeover is the act of gaining control of a company by buying more of its shares than anyone else. ...the proposed ₤3.4 billion takeover of Midland Bank by the Hong Kong and Shanghai. ...a hostile… …   English dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”