DEFINITION of 'Fat Man Strategy '

A takeover defense tactic that involves the acquisition of a business or assets by a target company. The strategy is based on the premise that the bulked-up company - the "fat man" - would have reduced appeal to a hostile bidder, especially if the acquisition increases the acquirer's debt load or decreases available cash.

BREAKING DOWN 'Fat Man Strategy '

This is a type of "kamikaze" defense tactic, which inflicts potentially irreversible damage on a company to prevent it from falling into hostile hands. However, it involves adding assets rather than divesting them as is the case with other kamikaze defense strategies. A disadvantage of this tactic is that acquisition candidates need to be identified well in advance of a hostile bid, otherwise there may be insufficient time to complete a fat man transaction.

  1. Kamikaze Defense

    A type of takeover defense mechanism sometimes resorted to by ...
  2. Hostile Takeover

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  3. Defensive Acquisition

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  4. Acquisition

    A corporate action in which a company buys most, if not all, ...
  5. Fat Cat

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  6. Suicide Pill

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