Corporate Raider

What is a 'Corporate Raider'

A corporate raider is an investor who buys a large number of shares in a corporation whose assets appear to be undervalued. The large share purchase would give the corporate raider significant voting rights, which could then be used to push changes in the company's leadership and management. This would increase share value and thus generate a massive return for the raider.

BREAKING DOWN 'Corporate Raider'

Companies have used a variety of strategies to thwart the efforts of corporate raiders. These include shareholders' rights plans (poison pills), super-majority voting, staggered boards of directors, buybacks of shares from the raider at a premium price (greenmail), dramatic increases of the amount of debt on the company's balance sheet and strategic mergers with a "white knight."

Famous corporate raider Carl Icahn used tactics such as taking a company private, compelling a spin-off, calling for an entirely new board of directors or calling for a divestiture of assets to make a fortune with his hostile takeovers.

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RELATED FAQS
  1. Why is a shareholder rights plan called a "poison pill?"

    Discover why shareholder rights plans are often called "poison pills" to fight hostile takeovers and give smaller corporations ... Read Answer >>
  2. How do a corporation's shareholders influence its Board of Directors?

    Find out how shareholders can influence the activity of the members of the board of directors and even change official corporate ... Read Answer >>
  3. What is a staggered board?

    A staggered board of directors (also known as a classified board) is a board that is made up of different classes of directors. ... Read Answer >>
  4. How much, if any, influence do non-controlling interest shareholders have?

    Examine some of the different ways non-controlling interest shareholders can exercise influence over both public and private ... Read Answer >>
  5. What is the difference between a poison pill defense and a suicide pill defense?

    Learn about different strategies a company uses to prevent hostile takeovers and the main difference between a poison pill ... Read Answer >>
  6. If a company offers a buyback of its shares, how do I decide whether to accept the ...

    Learn why it may often be in the best interest of a shareholder to accept a tender offer made at a premium to the market ... Read Answer >>
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