DEFINITION of 'Clandestine Takeover'

An attempt to gain control over a company through secretive means. Clandestine takeover attempts are often launched against publicly-traded companies where individuals can acquire shares on the secondary market without disclosing their activities. This may be advantageous in situations where existing management would be hostile to a conventional takeover bid.

BREAKING DOWN 'Clandestine Takeover'

Ownership disclosure laws differ from country to country. In the United States, one is normally required to disclose ownership positions of more than 5%. Depending on the disclosure rules in force in a particular jurisdiction, there may be means available to gain effective control of even larger ownership stakes without triggering disclosure requirements.

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RELATED FAQS
  1. Under what circumstances might a company decide to do a hostile takeover?

    Learn about why companies use a hostile takeover to gain control of another company, and understand the different methods ... Read Answer >>
  2. What happens to the shares of a company that has been the object of a hostile takeover?

    Learn about the effect on the share price of companies that are targets of hostile takeovers, which are tactics used by famed ... Read Answer >>
  3. What is the difference between an acquisition and a takeover?

    There is no tangible difference between an acquisition and a takeover; both words can be used interchangeably - the only ... Read Answer >>
  4. How can a company buy back shares to fend off a hostile takeover?

    Learn about why a business might use a stock buyback to thwart a hostile takeover attempt by reducing its total assets and ... Read Answer >>
  5. What is the difference between a hostile takeover and a friendly takeover?

    Learn about the difference between a hostile takeover and a friendly takeover, and understand how proxy fights and tender ... Read Answer >>
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