Regardless of whichever method the acquiring company uses to takeover, the target managers have many ways of defence against such takeovers. And if they achieve enough proxy votes, it can simply replace the board of directors and vote for the acquisition process.ĭefence mechanism against hostile takeover The payment can be done through cash, shares of the acquiring company or other securities.Īnother method of a hostile takeover is through a proxy fight, whereby the acquiring company can persuade other shareholders to vote on their behalf. The acquirer may do so through a tender offer, whereby the acquirer invites the shareholders to submit their shares in return for a premium price above the current market price. When an acquiring company takes over a target company (company being acquired) where the management of the target company is reluctant to offer ownership, then it is said to be a hostile takeover which contradicts a friendly takeover.
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