Sale Of Crown Jewels

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.

BREAKING DOWN '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. Crown Jewels

    The most valuable unit(s) of a corporation, as defined by characteristics ...
  2. Kamikaze Defense

    A type of takeover defense mechanism sometimes resorted to by ...
  3. Premium Raid

    An attempt by a corporate raider or acquiring company to procure ...
  4. Quote Stuffing

    A tactic of quickly entering and withdrawing large orders in ...
  5. Lobster Trap

    A strategy used by a target firm to prevent a hostile takeover. ...
  6. Invitation For Bid - IFB

    When a company or organization provides detailed project specifications ...
Related Articles
  1. Investing Basics

    How to Dodge Brokers Using Smarmy Sales Tactics

    Many finance professionals use illegal, high-pressure sales tactics to sell bad securities to investors. Here's how to know if you're being swindled.
  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. Options & Futures

    Mergers and Acquisitions: Doing The Deal

    Start with an Offer When the CEO and top managers of a company decide that they want to do a merger or acquisition, they start with a tender offer. The process typically begins with the acquiring ...
  4. Investing Basics

    Warding Off Hostile Takeovers

    The purpose of this article is to provide a general overview of hostile corporate takeovers, while highlighting a general course of action against such activity. This article provides basic information ...
  5. Investing Basics

    High-Pressure Sales Tactics You Should Be Aware Of

    Beware of financial advisors (and others) who use these common high-pressure sales tactics.
  6. Economics

    What's a Conglomerate?

    A conglomerate is a corporation that’s comprised of several different independent businesses.
  7. Investing

    What's an Acquisition?

    In corporate terms, an acquisition is the purchase of a company or the division of a company. Some acquisitions are paid in cash, while others are paid with a combination of cash and the acquiring ...
  8. Investing Basics

    What is the Shadow Banking System?

    The shadow banking system is composed of financial institutions that do not take deposits in the tradition sense.
  9. 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.
  10. Mutual Funds & ETFs

    Corporate Takeover Defense: A Shareholder's Perspective

    Find out the strategies corporations use to protect themselves from unwanted acquisitions.
RELATED FAQS
  1. How can a company buy back shares to fend off a hostile takeover?

    Learn about why a business might use a stock buyback to thwart a hostile takeover attempt by reducing its total assets and ... Read Answer >>
  2. Under what circumstances might a company decide to do a hostile takeover?

    Learn about why companies use a hostile takeover to gain control of another company, and understand the different methods ... Read Answer >>
  3. What happens to the shares of a company that has been the object of a hostile takeover?

    Learn about the effect on the share price of companies that are targets of hostile takeovers, which are tactics used by famed ... Read Answer >>
  4. 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 >>
  5. What's the difference between a merger and a hostile takeover?

    Understand the difference between a merger and a hostile takeover, including the different ways one company can acquire another, ... 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 >>
Hot Definitions
  1. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  2. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  3. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  4. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  5. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  6. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
Trading Center