Sale Of Crown Jewels

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DEFINITION of 'Sale Of Crown Jewels '

A takeover-defense tactic that involves the sale of the target company's prized and most coveted assets - the "crown jewels" - so as to reduce its attractiveness to the hostile bidder. The sale of a company's best assets will leave it as a mere shadow of its former self. This is a type of "kamikaze" defense tactic, which inflicts potentially irreversible damage on a company to prevent it from being acquired by a hostile party.

INVESTOPEDIA EXPLAINS 'Sale Of Crown Jewels '

This tactic is sometimes used by conglomerates, which often attract hostile bidders because they can trade at a price below their break-up value due to the "conglomerate discount." A potential pitfall of this tactic is that a quick sale of prized assets may fetch a price far below what they are actually worth.

RELATED TERMS
  1. Kamikaze Defense

    A type of takeover defense mechanism sometimes resorted to by ...
  2. Crown Jewels

    The most valuable unit(s) of a corporation, as defined by characteristics ...
  3. Hostile Takeover

    The acquisition of one company (called the target company) by ...
  4. Black Knight

    A company that makes a hostile takeover offer for a target company. ...
  5. Mergers And Acquisitions - M&A

    A general term used to refer to the consolidation of companies. ...
  6. Conglomerate Discount

    A reference to the tendency of the stock market to undervalue ...
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