What can an acquirer in hostile takeover do against the target's defensive tactics?
Answers:
Well, if it's hostile, I guess negotiating it away is out of the question. What you can do is to sue or have minority shareholders who can form a class-action lawsuit against the board's adoptation of the defensive tactics as anti-shareholder value.
You can also do what Carl Icahn does. Become a vocal but threatening minority shareholder, even with a couple of board member seats. Then you can greenmail the company and make it choose between the a debilitating cash drain or a hostile takeover where they can get paid.
Other ways include PR battles in the media to incite workers or shareholders activism against the board, lawsuit on patents or copyrights, or even change the competitive landscape by purchasing important channel partners or vendors (a la Oracle buying out Hyperion). Anything to put the target in a position which the hostile takeover is lesser of the two evil.
I'm sure there are numerous other ways to do this... but most involves cash regardless.
I recommend:
1) Don't bother unless the existence of your company depends on the acquisition, or if your company has strong enough balance sheet to just throw cash at the target. Even if you do get the company, you will have a mass exodus of valuable human capital and a bitter corporate culture which makes integration more difficult.
Just BE!
destroy them
Yes, they can raise the bidding price.
They can also go to court to have the defensive tactics thrown out.
Personal visits to major shareholders to see what their concerns are also work, as do ad campaigns.
Your question sounds like an oversimplification. This is a very complicated issue. First of all, you'd need to describe the industrial sector. Then the size of the company. Then the nature of the defense. And finally the nature of the organization.
The reasons are many, but to simplify,
Takeover in the banking sector will differ from taking over a retail business or a manufacturing business. Tactically they all have different goals and different weak points.
Secondly, the size of the entity matters because a close corporation has different shareholder rules than a publicly traded corporation or a sole proprietorship.
Third, you can't figure out how to overcome a defense without knowing what specific defensive strategies are in play. You have to prepare for every possible defense.
Fourth, an LLC, an LLP, a Close Corporation, an LLLC, a PC, a Sole Proprietorship, a Franchise and other forms of business entities all have different operating plans and operating regulations, so the method for handling a "hostile takeover" will vary.
You need to sit down, figure out the answers to these questions, and then figure out what approach you want to use.
It sounds like you have a small amount of business knowledge. You may want to see if there is another, more experienced business person interested in sharing this venture with you. You'd just need to work out how the proceeds will be divided up once you aquire the business. That will require lawyers.
I would do this:
1. I would to lobby around the current major shareholders and make them believe that the current board are the DEVIL and the take cover company would be a safer HEAVEN for their investments.
2. In case of a poison pill there is no other way than going to court, unless that you can remove people from the board pressured from inside based on the interest of the major shareholders..
3. This depends on the geographical location of the firm and the relationship with the government, sometimes there is no other way than walking away since the merger will create monopoly.
4. Depending on the financial situation of the firm, sometimes lowering the price of a second bid might do it :=) to make the board desperate for money, and their heads are on the line.
5. If buying the whole company is not the option, BUY THEIR BRANDS! or get a hold of their patents if possible. You will kill them anyway, if that is what you want.
6. Control their loans or seize part of their assets, or buy business partners such as main suppliers instead, if they are small enough to handle them.
7. If ethics is not an issue and if the company is really big, come up with half truths that are hidden from the shareholders, and that must be commonly disclose to shareholders, that should be good enough to set up a fire somewhere.
8. If your interest is to expand your operations, present the bid with the backup of current major customers of the target firm as long as your espionage is correct.
well, hopefully these are good ideas for you
regards
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