Hostile Takeovers Explained – When Companies Say No
A hostile takeover occurs when an acquiring company attempts to gain control of another business without the approval of its board or management, often by appealing directly to shareholders or replacing directors through proxy votes. Understanding this concept is essential for any executive navigating corporate strategy, M&A activity, or investor relations. In this article, you’ll explore how hostile takeovers work , why they occur, and what defenses companies use to resist them. You’ll also learn about famous cases, legal implications, and key lessons for business leaders managing unsolicited acquisition threats . What Is a Hostile Takeover? A hostile takeover is a corporate acquisition attempt made against the wishes of a target company’s board. Unlike friendly mergers, where both sides negotiate terms, a hostile bid bypasses management altogether. The acquirer goes directly to shareholders or seeks to replace board members who oppose the deal. Hostile takeovers typically ar...