DEFINITION of 'Killer Bees'

Killer bees are firms or individuals that help other companies avoid takeovers, such as investment bankers, accountants, attorneys and tax specialists, by aggressively devising and implementing anti-takeover strategies. These generally make the target company less attractive or more difficult to acquire, by forcing acquirers to pay more, or by diluting the acquirer’s holdings.


During the 1980s hostile takeover craze, killer bees would, like their namesake, act aggressively on behalf of a firm threatened by a hostile takeover. All manner of strategies and tactics were employed to thwart hostile takeovers. These takeover defenses included shark repellents to make the takeover less attractive or profitable to the acquisitive firm, such as poison pills and suicide pills — which would drive the firm into bankruptcy.

Other Types of Defenses

Other tactics which emerged during the 1980s, included the white knight defense, where a friendly company acquires a corporation on the verge of being taken over, and white squires which would buy a partial stake in a target company. In the Pac-Man defense, named after the classic eat-or-be-eaten arcade game, the target company would turn the tables on the acquirer by making a takeover bid for it. In the lobster trap, the target company would pass a provision that prevents any shareholder with an ownership stake of over 10% from converting convertible securities into voting stock – to prevent large shareholders from gaining enough votes to force the board to accept the merger.

Another technique that was popular during the 1980s was greenmail, where the target company buys back its recently acquired stock from a raider at a higher price – and at shareholders’ expense — in return for the raider agreeing not to make another takeover attempt. By using whitemail, and issuing a large number of shares at below-market prices, the target company could also make the acquisition much more expensive to complete.

Litigation, such as standstill agreements, might also be used to delay any takeover.

  1. Hostile Takeover

    A hostile takeover is the acquisition of one company by another ...
  2. Anti-Takeover Measure

    In order to block hostile bids for control of a company, the ...
  3. Whitemail

    A strategy that a takeover target uses to try and thwart an undesired ...
  4. Takeover

    A takeover occurs when an acquiring company makes a bid in an ...
  5. People Poison Pill

    A people pill is a defensive strategy to ward off a hostile corporate ...
  6. Suicide Pill

    A suicide pill is a defensive strategy by which a company trying ...
Related Articles
  1. Investing

    What Investors Can Learn From M&A Payment Methods

    How a company pays in a merger or acquisition can reveal a lot about the buyer and seller.
  2. Trading

    Trade Takeover Stocks With Merger Arbitrage

    This high-risk strategy attempts to profit from price discrepancies that arise during acquisitions.
  3. Insights

    Ariad Receives Interest as a Buyout Candidate

    Following failed buyout talks with Baxalta last year, Ariad’s stock is spiking amid rumors of a takeover.
  4. Investing

    8 More Stocks That May Surge On 2018 Takeovers: Goldman Sachs

    M&A mania: following up on a previous story, here are 8 more stocks that Goldman tabs as likely buyout targets.
  5. Insights

    Failed Takeovers During The Recession

    Takeover attempts were popular in late 2008 to 2009, but some deals just didn't make it.
  6. Insurance

    Key Players In Mergers And Acquisitions

    Strategic acquisition is becoming a part of doing business. Discover the different types of investor groups involved.
  7. Investing

    Megadeals Push Global Takeovers Past $1.2 Trillion

    Numerous factors are set to drive another record year for M&A, despite political uncertainty.
  8. Investing

    A New Corporate Governance Initiative In Japan

    Expectations are low that Japan can create a corporate governance climate that meets global standards, but a new initiative is aimed at doing just that.
  9. Investing

    Micron Technology Soars on Takeover Rumors

    Long-suffering Micron Technology (NASDAQ: MU) shareholders got a boost on Monday following its shareholder rights filing with the SEC on Friday. In what is often referred to as a "poison pill" ...
  1. How company stocks move during an acquisition

    During an acquisition, there's a short-term impact on the stock prices of both companies. Typically, the target company's ... Read Answer >>
  2. 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 >>
  3. Why is a shareholder rights plan called a "poison pill?"

    Discover why shareholder rights plans are often called "poison pills" to fight hostile takeovers and give smaller corporations ... Read Answer >>
  4. What is the difference between a "flip-in" and "flip-over" poison pill?

    Learn about strategies used to defend against hostile takeovers, what a poison pill is and the difference between a flip-in ... Read Answer >>
  5. What is the significance of a Schedule 13D?

    A Schedule 13D is significant because it provides investors with useful information on everything an investor could want ... Read Answer >>
Hot Definitions
  1. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  2. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  3. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
  4. Current Assets

    Current assets is a balance sheet item that represents the value of all assets that can reasonably expected to be converted ...
  5. Volatility

    Volatility measures how much the price of a security, derivative, or index fluctuates.
  6. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
Trading Center