Identify the more common forms of takeover defence, and suggest why they are used.

Expert Solution

Takeover defences are the actions by the managers or employees to resist the acquisition of the firms. They use the defense because of the fear of the changes and insecurity the new managemnt will implement.

Straggered Board- The purchaser / bidder cannot obtain control of the target immediately after obtaining the majority of shares% o

Super-majority - A high percentage of shares required to approve the merger , using 80% of vote from board can avoid this

Poison Pill - Rights to preferred stock issued to shareholders. Right can be exercised after tender offer or accumulation of the large no of shares by outside party.

Dual class Recapitalization - Distributes a new class of equity to stock holders with superior voting rights but inferior dividend or marketability. Allows the shareholder to exchange the new shares for ordinary common stock.

These are mainly the prior take over defenses there are other defenses which are post take over namely

Namely

Targeted Repurchase - Repurchase of shares held by a shareholder usually by oaying more

Stand still Agreement - Limitis ownership by a given firm for a specific period of time.

Litigation- File a suit against the bidder for security laws

Assets Restructuring - Assets bought that a the bidder doesnot require or sold what he needs the most will create trust issues

Liability Restructuring - Issuing shares to a creditor with good relation, Increasing no of shares. Etc.

All these will create some issues with the bidder.

ekkarill92 answered 2 years ago

Provide an example of a company where the anti-takeover defence would benefit management but not shareholders....

Provide an example of a company where the anti-takeover defence would benefit management but not shareholders. Explain the mechanism or type of contract that shareholders can put in place to avoid this situation.

Explain organizational commitment, and identify its three common forms

Explain organizational commitment, and identify its three common formsTime management is said to reduce stress. Name and describe some time management techniques that may be used to reduce stress.Identify some of the consequences of job dissatisfaction.Identify and explain some important trends that are leading to an increasingly diverse workplace.Identify and describe the four properties of emotions.

With reference to corporate restructuring, suggest five defence techniques that a targeted company might use to...

With reference to corporate restructuring, suggest five defence techniques that a targeted company might use to avoid a hostile takeover bid.

(At least 300 Words) The Corporate Takeover Market: Common Takeover Tactics, Antitakeover Defenses, and Corporate Governance....

(At least 300 Words) The Corporate Takeover Market: Common Takeover Tactics, Antitakeover Defenses, and Corporate Governance. Friendly takeover is clear, how about a hostile takeover. Can you provide one example and briefly discuss. Discuss one pro and one con of a friendly takeover AND a hostile takeover. You can also add one of the techniques used to assist or deter these type of takeovers.

Identify common forms of hiring and performance bias. What can be done to avoid this?

Identify five (5) common communication barriers you are likely to encounter at the work place. Suggest...

Identify five (5) common communication barriers you are likely to encounter at the work place. Suggest ways to over come each of these 5 communication barriers.

Why is acidosis more common than alkalosis?

why it is often difficult to identify the problems that create the planninggap? suggest atleast one...

why it is often difficult to identify the problems that create the planninggap? suggest atleast one such method to the marketing planner, how will you see that gap?

Chapter 13: Financing the Deal and (LBO's). This takeover structure is used but not limited by...

Chapter 13: Financing the Deal and (LBO's). This takeover structure is used but not limited by private equity firms when taking over a company using heavy leverage along with some equity. This excessive leverage can magnify financial returns and also increase risks. Assets are usually acquired and used as collateral for the extensive loans that are taken out. RJR Nabisco was one the largest LBOS’ in history. This is an Important topic in Mergers!Provide your thoughts about the LBO’s method...

Identify the suggested potential motivations from a proposed merger or takeover, and discuss whether they are...

Identify the suggested potential motivations from a proposed merger or takeover, and discuss whether they are likely to produce a beneficial outcome.

Question