Scroll Top

search-icon
    drop-arrow

    Hostile Takeover

    Introduction

    A hostile takeover is a way in which a company is acquired by another company. The company being acquired is referred to as the target company and the company purchasing the target company is called as the acquirer.

    A hostile takeover happens when the acquirer goes through the company’s shareholders or combat the management of the company in order to get approval for the acquisition. Hostile takeovers may be completed by either proxy fight or tender offer.

    The major characteristic of hostile takeovers is that the management of the target company will not wish the acquisition deal to happen. At times, the management of the target company tries to fend against the hostile takeovers by making use of strategies that are considered controversial, such as the golden parachute, the Pac-Man defence, crown-jewel defence, and the poison pill.

    Breaking Down Hostile Takeover

    Bid for hostile takeover happens when an organisation tries to gain control over a company by not taking the consent or approval from the management of the target company. Instead of taking approval from the board of directors of the target company, the acquirer will try to gain control over the company by issuing a tender offer, come up with a proxy fight, or try to purchase the requisite number of shares of the target company in the open markets.

    In order to spoil the efforts of the acquirer, the management of the target company will come up with defence mechanisms and may make use of the reactive defence mechanism in order to withstand the acquisition.

    Factors Driving a Hostile Takeover

    There are several factors that drive a hostile takeover of a company. One such factor is that the acquirer company believes that the target company is undervalued and would be beneficial in the long run if they take over that company.

    Sometimes, hostile takeovers are strategic moves by investors who are activists and are in pursuit of changing the management and operations of the company.

    Index

    Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

    Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

    CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

    Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

    Cleartax is a product by Defmacro Software Pvt. Ltd.

    Company PolicyTerms of use

    ISO

    ISO 27001

    Data Center

    SSL

    SSL Certified Site

    128-bit encryption