Godfather Offer

Filed Under » , ,
Dictionary Says

Definition of 'Godfather Offer'

An irrefutable takeover offer made to a target company by an acquiring company. Typically, the acquisition price's premium is extemely generous compared to the prevailing market price. Therefore, if the target company's management refuses the offer, shareholders may initiate lawsuits or other forms of revolt against the target company for not performing their fidiciary duty of looking out for the best interests of the shareholders.
Investopedia Says

Investopedia explains 'Godfather Offer'

The offer is even harder for the target company's management to refuse when its stock price has been flat or declining for an extended period of time, as long-time investors would jump at the opportunity to cash out at an elevated price.

Similar to the famous Godfather in the trilogy of movies, the bidding company is essentially making an offer the target company cannot afford to refuse.

Articles Of Interest

  1.

    Mergers And Acquisitions: Understanding Takeovers

    In the dramatic world of M&As, battleground terms meld with bizarre metaphors to form the language of the game.

  2. Bloodletting And Knights: Medieval Investment Terms

    From bloodletting to ye olde black knights, things on Wall Street are getting downright medieval!

  3. Handcuffs And Smoking Guns: The Criminal Elements Of Wall Street

    From godfathers to perps, familiarize yourself with the "criminal elements" creeping around Wall Street.

  4. Valeant Eyes Bausch & Lomb

    Canadian pharmaceutical company Valeant has made a name for itself through acquisitions. On May 27 it announced that it was buying Bausch & Lomb for $8.7 billion making it a global leader in ...

  5. Sears' Losses Widen In Q1 - Time To Merge With JC Penney?

    Sears Holdings delivered another brutal quarter May 23. CEO and majority owner Edward Lampert has his hands full trying to revive a truly broken department store. Rumor has Neiman Marcus and ...

  6. Arbitrage Squeezes Profit From Market Inefficiency

    This influential strategy capitalizes on the relationship between price and liquidity.

  7. If Investors Won't Buy Retailers, Private Equity Will!

    Private equity seems to think the apparel retailing sector is on sale

  8. General Motors Hits $33: Where To From Here?

    While business seems reasonably strong in Detroit, there's no guarantee it will stay that way. Is GM a momentum play or should investors stay away. I'll answer both sides of this question.

  9. Elan Continues To Make Baffling Strategic Decision

    Elan seems to be set on wasting the Tysabri windfall instead of returning it to shareholders

  10. Yahoo! Adds Tumblr, But Is This Another Underpants Gnome Deal?

    Tumblr is a high-potential asset, but Yahoo! absolutely must execute.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Xenocurrency

    A currency that trades in markets outside of its domestic borders.

  2. Wanton Disregard

    A standard of severe negligence. Wanton disregard is a very serious accusation that indicates that a person behaved extremely recklessly.

  3. Ultra ETF

    A class of exchange-traded funds (ETF) that employs leverage in an effort to achieve double the return of a set benchmark.

  4. Toehold Purchase

    A purchase of less than 5% of a target company's outstanding stockmade by an acquiring company. A toehold purchase of just under 5%, while not a significant stake in a firm, allows the shareholders a "toe-holds" grip on the company and its decision making.

  5. Samurai Bond

    A yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations.

  6. Chartalism

    A non-mainstream theory of money that emphasizes the impact of government policies and activities on the value of money.
Trading Center