Hostile Takeover


DEFINITION of 'Hostile Takeover'

The acquisition of one company (called the target company) by another (called the acquirer) that is accomplished not by coming to an agreement with the target company's management, but by going directly to the company's shareholders or fighting to replace management in order to get the acquisition approved. A hostile takeover can be accomplished through either a tender offer or a proxy fight.


Loading the player...

BREAKING DOWN 'Hostile Takeover'

The key characteristic of a hostile takeover is that the target company's management does not want the deal to go through. Sometimes a company's management will defend against unwanted hostile takeovers by using several controversial strategies including the poison pill, crown-jewel defense, golden parachute, pac-man defense, and others.

  1. Backflip Takeover

    An uncommon type of takeover in which the acquirer becomes a ...
  2. Bon Voyage Bonus

    Cash, securities or other assets paid to an individual or group ...
  3. Merger Mania

    A period of time with significant merger and acquisition activity ...
  4. Bear Hug

    An offer made by one company to buy the shares of another for ...
  5. Black Knight

    A company that makes a hostile takeover offer for a target company. ...
  6. Poison Pill

    A strategy used by corporations to discourage hostile takeovers. ...
Related Articles
  1. Fundamental Analysis

    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. Investing

    Hostile Takeover

    A hostile takeovers is an unfriendly acquisition attempt by a company or raider that is strongly resisted by the management and the board of directors of the target firm. Learn more about the ...
  3. Home & Auto

    The Getty Oil Takeover Fiasco

    It was the largest takeover in history and one of the most dramatic. Learn all about the fate of Getty Oil.
  4. Bonds & Fixed Income

    Cashing In On Corporate Restructuring

    Companies use M&As and spinoffs to boost profits - learn how you can do the same.
  5. Bonds & Fixed Income

    What Are Corporate Actions?

    Be a savvy investor - learn how corporate actions affect you as a shareholder.
  6. Options & Futures

    Signs That It Might Be Time To Sell

    In the stock market, knowing when to sell is just as important as knowing when to buy.
  7. Mutual Funds & ETFs

    Corporate Takeover Defense: A Shareholder's Perspective

    Find out the strategies corporations use to protect themselves from unwanted acquisitions.
  8. Stock Analysis

    The Top 5 Apple Shareholders

    Learn about insiders and institutional investors with large positions in Apple. Read about Carl Icahn's activist campaign against Apple.
  9. Stock Analysis

    A Quick Look at Rite Aid's History

    Discover the history of Rite Aid, the third-largest U.S. drugstore chain. Learn about a potential merger that could drastically change the industry.
  10. Investing

    Wal-Mart's Share Repurchase Isn't All Good

    Wal-Mart announced huge internal investments along with an aggressive share repurchase program that isn't as good as it initially sounds.
  1. If a company offers a buyback of its shares, how do I decide whether to accept the ...

    Tender offers for share buybacks are often made at a premium to the current market price; it may be in an investor’s best ... Read Full Answer >>
  2. How is a tender offer used by an individual, group or company seeking to purchase ...

    A tender offer is made directly to shareholders in a publicly traded company to gain enough shares to force a sale of the ... Read Full Answer >>
  3. What are some examples of successfully executed leveraged buyouts?

    In finance, a buyout refers to the purchase of a company's voting stock in which the acquiring party gains control of the ... Read Full Answer >>
  4. What is the difference between a hostile takeover and a friendly takeover?

    A hostile takeover occurs when one corporation, the acquiring corporation, attempts to take over another corporation, the ... Read Full Answer >>
  5. What happens to the shares of a company that has been the object of a hostile takeover?

    The shares of a company that is the object of a hostile takeover rise. When a group of investors believe management is not ... Read Full Answer >>
  6. How do modern corporations deal with agency problems?

    Agency problems – also known as principal-agent problems or asymmetric information-driven conflicts of interest – are inherent ... Read Full Answer >>
  7. How do companies use the Pac-Man defense?

    To employ the Pac-Man defense, a company will scare off another company that had tried to acquire it by purchasing large ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Candlestick

    A chart that displays the high, low, opening and closing prices for a security for a single day. The wide part of the candlestick ...
  2. Bar Chart

    A style of chart used by some technical analysts, on which, as illustrated below, the top of the vertical line indicates ...
  3. Bullish Engulfing Pattern

    A chart pattern that forms when a small black candlestick is followed by a large white candlestick that completely eclipses ...
  4. Cyber Monday

    An expression used in online retailing to describe the Monday following U.S. Thanksgiving weekend. Cyber Monday is generally ...
Trading Center