Equity · Core
Hostile Takeover
A hostile takeover is an attempt to buy control against the target board’s recommendation — a bid to shareholders, not a negotiated merger.
Definition
The bidder goes to shareholders via tender or proxy after the board says no. Poison pills, staggered boards, and regulators are the defenses. Price still has to clear the residual holder.
Why it matters
Governance and control premia show up here. A ‘strategic’ no from the board is sometimes a price negotiation in costume.
Case
A cash bid at 30% premium is rejected as ‘undervaluing the plan.’ Six months later the same board sells at 32% after a proxy threat. The plan was a reservation price.
How to read it
Cap table, pill, regulatory clock, and committed financing. Hostility is a tactic; the constraint is votes and cash.
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