Sale Of Crown Jewels

AAA

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. Black Knight

    A company that makes a hostile takeover offer for a target company. ...
  3. Hostile Takeover

    The acquisition of one company (called the target company) by ...
  4. Mergers And Acquisitions - M&A

    A general term used to refer to the consolidation of companies. ...
  5. Crown Jewels

    The most valuable unit(s) of a corporation, as defined by characteristics ...
  6. Conglomerate Discount

    A reference to the tendency of the stock market to undervalue ...
RELATED FAQS
  1. How are corporate poison pills regulated in the United States?

    The Delaware Supreme Court was the first legal authority to declare poison pills a valid initiative. This defense is either ... Read Full Answer >>
  2. How can a company resist a hostile takeover?

    Several different defense strategies can be applied by existing corporate boards to ward off a hostile takeover. The most ... Read Full Answer >>
  3. How does a letter of intent work in the context of mergers and acquisitions?

    A letter of intent, or LOI, is used to set forth the terms of a proposed merger or acquisition. It is usually the first step ... Read Full Answer >>
  4. 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 >>
  5. 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 >>
  6. What are some roles of an investment bank?

    Investment banks serve a number of purposes in the financial and investment world, including underwriting of new stock issues, ... Read Full Answer >>
Related Articles
  1. Mutual Funds & ETFs

    Corporate Takeover Defense: A Shareholder's Perspective

    Find out the strategies corporations use to protect themselves from unwanted acquisitions.
  2. Bonds & Fixed Income

    Trademarks Of A Takeover Target

    These tips can lead you to little companies with big prospects.
  3. Active Trading Fundamentals

    Trade Takeover Stocks With Merger Arbitrage

    This high-risk strategy attempts to profit from price discrepancies that arise during acquisitions.
  4. Options & Futures

    Pinpoint Takeovers First

    Use these seven steps to discover a takeover before the rest of the market catches on.
  5. Economics

    What is a Management Buyout?

    A management buyout, or MBO, is a transaction where a company's management team purchases the assets and operations of the business they manage.
  6. Fundamental Analysis

    Explaining Enterprise Multiple

    The enterprise multiple is a ratio used to value a company as if it was going to be acquired.
  7. Chart Advisor

    3 Basic Material Stocks Poised For A Pop

    After large market swings such as the one seen on March 30, 2015, it is not surprising to see traders become more tolerant towards taking on risk.
  8. Stock Analysis

    Will Kraft-Heinz Be a Winner?

    Kraft and Heinz are now one. This should present a profitable long-term investment opportunity, but isn't likely to be smooth sailing at first.
  9. Investing

    WhatsApp: The Best Facebook Purchase Ever?

    WhatsApp is Facebook's largest acquisition to date. What makes it worth the major price tag?
  10. Fundamental Analysis

    Private vs Public Equity: What's Best?

    What is the better way for a company to attract investors; by making its stock available for sale to whoever wants some, or by petitioning rich people?

You May Also Like

Hot Definitions
  1. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  2. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  3. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  4. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  5. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center