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Hostile Takeovers


wealthymatters.comWHAT IS A HOSTILE TAKEOVER? WHY IS IT CALLED SO?
The acquisition of a company by another by directly approaching the  company’s shareholders and not reaching an agreement with the management of the target company is called a hostile takeover or a forced takeover bid. Many a time, the acquirer will try to replace the target company management or tender an offer to get a takeover done. The key characteristic of a hostile takeover is that the target co’s management doesn’t want the deal to go through.
HOW IS IT DIFFERENT FROM A NORMAL TAKEOVER OR ACQUISITION?
In a normal takeover or acquisition, the buyer as well as the seller reaches an agreement on the pricing, the sale and the nature of the merged entity. But in a hostile takeover, the management of the company does not support the unsolicited offer and reject it. In such a case, the offer is made against the will of the management to the shareholders by the acquirer based on which a decision is taken.  Read more of this post

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