Ways to Prevent a Hostile Takeover

Antitakeover defense strategies can be organized into two buckets:
(1) Preventing a hostile takeover bid from ever occurring
(2) Stopping a hostile takeover bid from being successful after the bid has been made
Preventative measures include poison pills and corporate charter amendments (staggered boards, supermajority provisions, dual-class structure).
Once a hostile takeover bid has been made, the target company can stop the takeover by paying greenmail, changing its capital structure, finding a white knight or white squire, engaging in litigation, or attempting to acquire the hostile bidder (Pac-Man Defense).-
Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education freely available to the world.
-
SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS, PLUS:
• A 23-PAGE GUIDE TO MANAGERIAL ACCOUNTING
• A 44-PAGE GUIDE TO U.S. TAXATION
• A 75-PAGE GUIDE TO FINANCIAL STATEMENT ANALYSIS
• MANY MORE FREE PDF GUIDES AND SPREADSHEETS
eepurl.com/dIaa5z
-
SUPPORT EDSPIRA ON PATREON
* / prof_mclaughlin
-
GET CERTIFIED IN FINANCIAL STATEMENT ANALYSIS, IFRS 16, AND ASSET-LIABILITY MANAGEMENT
edspira.thinki...
-
LISTEN TO THE SCHEME PODCAST
Apple Podcasts: podcasts.apple...
Spotify: open.spotify.c...
Website: www.edspira.co...
-
GET TAX TIPS ON TIKTOK
/ prof_mclaughlin
-
ACCESS INDEX OF VIDEOS
www.edspira.co...
-
CONNECT WITH EDSPIRA
Facebook: / edspira
Instagram: / edspiradotcom
LinkedIn: / edspira
-
CONNECT WITH MICHAEL
Twitter: / prof_mclaughlin
LinkedIn: / prof-michael-mclaughlin
-
ABOUT EDSPIRA AND ITS CREATOR
www.edspira.co...
michaelmclaugh...

[@ColonelRoseru]

Thanks I am trying to prevent hostile takeover right now, this was very useful.

[@sul3man]

All I can say is Thanks man! youre a lifesaver.

[@selena1094]

You’re doing gods work

[@Edspira]

Thank you!

[@francoisfalcato7349]

Fast and simple to understand! Thank you

[@watenehetaraka4345]

Policy\Payout of Commission stake if you got that far

[@ElBlancoFinance]

I owe you my bachelors degree. Thank you so much!

[@Nirsterkur]

Thank you.

[@favesongslist]

What are the downsides of the poison pill? How does it effect the share price? Why not sell the new shares at just 1% to make sure the shareholders buy them? How many poison pills can be running at once?

[@zawash]

Well I'm not much of an expert, but I think that putting too much "poison" in the company could discourage other separate shareholders from buying them non-hostile-ly, if that makes sense. There might be a way to restrict this "new shares at just 1%" legislation to just the hostile company, but I think it's unlikely. It's better to get money flowing in the companies than none at all, that's why the poison pill should be used sparingly. Don't take my word for it though, I haven't looked into this. This is just assumption, logic, and common knowledge.

[@zawash]

Think of it as like friendly fire.

[@favesongslist]

@@zawash TY for your answer, so somewhere there must be some sort of legislation on this you think?

[@zawash]

@@favesongslist For legislation you could in place yourself, The water of those are waving. I haven't looked into it yet I don't think there would be any things that you could do in that route, speaking transparently legally. But don't take my word for it, I'd advise you to look into it yourself, I'm not a lawyer.

[@rossfriedman6570]

Why is there a high tax on greenmail?

[@agooddaytosmile6274]

What a great explanation🔥! Thank you so much!

[@11jbhalla]

What subject is this??

[@rossfriedman6570]

Poison pill sounds like the absolute worst type of preventative measure because of diluted eps

[@adrianmarino8115]

Youre god