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Hostile take over aggressive defensive strategies


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Hostile take over aggressive defensive strategies

  1. 1. 1 D R R A J U I N D U K O O R I Hostile Take Over Aggressive Defensive Strategies
  2. 2. AGGRESSIVE STRATEGIES D R R A J U I N D U K O O R I 2 1) Pac Man Defense 2) Crown Jewel 3) Selling assets at low price to friendly companies 4) Invite competition for corporate raid. 5) Litigation
  3. 3. 1. PACMAN STRATEGY D R R A J U I N D U K O O R I 3 • Counter bid by target firm to acquire raider. • Target firm offers a price above the market price to the shareholders of the corporate raider. • This makes the raider step back and think about the hostile takeover.
  4. 4. 2. CROWN JEWEL D R R A J U I N D U K O O R I 4 • Target firm secures its valuable subsidiary or division by insulating it from the corporate raider. • Spin off : It is the process of converting the existing subsidiary or a division into a new company.
  5. 5. 3. SELLING ASSETS AT LOW PRICE TO FRIENDLY COMPANIES D R R A J U I N D U K O O R I 5 • Target firm sells its valuable asset to a friendly firm • Though takeover is complete, Raider is denied access to jewel. • India cements ltd failed to meet its objectives of Raasi Cements takeover as Vishnu Cements (motive for takeover) was sold to major investors after Takeover.
  6. 6. 4. INVITE COMPETITION FOR CORPORATE RAID. D R R A J U I N D U K O O R I 6 Target firm invites or ignites other firms to bid for its shares so that offer price becomes lucrative and it also creates competition dissolving the idea of hostile takeover.
  7. 7. 5 LITIGATION D R R A J U I N D U K O O R I 7 • Revoke litigations • This makes target firm unattractive due to the legal complications.
  8. 8. Any Questions…. 8 D R R A J U I N D U K O O R I
  9. 9. Thank You 9 D R R A J U I N D U K O O R I