Takeover strategies

Takeover strategies

 

The various kinds of takeover strategies are as follows

Casual Pass: Casual pass is a process in which bidders often initiate contact casually through an intermediary or through a more formal inquiry. The bidder’s options under the friendly approach are to either walk away or to adopt more aggressive tactics if the target’s management and board spurn the bidder’s initial offer.

Bear Hug: Bear Hug is an offer made by one company to buy the shares of another for a much higher per-share price than what that company is worth. A bear hug offer is usually made when there is doubt that the target company’s management will be willing to sell. The name “bear hug” reflects the persuasiveness of the offering company’s overly generous offer to the target company.

Tender Offers: Tender offer is a corporate finance term denoting a type of takeover bid. The tender offer is a public, open offer or invitation (usually announced in a newspaper advertisement) by a prospective acquirer to all stockholders of a publicly traded corporation (the target corporation) to tender their stock for sale at a specified price during a specified time, subject to the tendering of a minimum and maximum number of shares.

Proxy Fights: Proxy fight refers to the process when a group of shareholders are persuaded to join forces and gather enough shareholder proxies to win a corporate vote. This is referred to also as a proxy battle. The acquirer will persuade existing shareholders to vote out company management so that the company will be easier to takeover.

Fairness Opinion: Fairness Opinion is a report evaluating the facts of a merger or acquisition. Fairness opinions are compiled by qualified analysts or advisors, usually of an investment bank, for key decision makers. The report examines the fairness of the offered acquisition price.

Go back to tutorial