hostile takeover bid

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andersxman

Senior Member
Denmark/danish
I am reading an article concerning a takeover-bid. I was confounded when I saw that a takeover bid can be "hostile". What difference is there between a "normal" takeover bid and a "hostile" one. Will the company in question be dismantled in the second case - maybe so as to rid the market of competitors of the company that is purchasing?

(...) But the Indian tycoon finally succeeded in winning over the Arcelor board after Mittal had upped its bid for Arcelor by 10 percent, with one source telling German paper Handelsblatt that the Indian side had made "extreme concessions."

Mittal's takeover attempts have long been seen as hostile, with Mr Juncker saying in April "I cannot see why there should be hostile takeovers in the EU."

But according to Sunday's deal, the firm will be called Arcelor-Mittal and will keep its Luxembourg headquarters.
(...)
 
  • panjandrum

    Lapsed Moderator
    English-Ireland (top end)
    Here is an outsider's understanding:
    A hostile take-over is a bid, or an attempt through the stock market, to gain control of a company against the wishes of the existing management.

    I don 't think it has anything to do with what the bidder would do with the company should the attempt be successul - but I could be wrong.
     

    coconutpalm

    Senior Member
    Chinese,China
    A hostile take-over is hostile. Strongly resisted by target company, it usually causes big problem after Company A is taken over by Company B. e.g. negative attitudes of the original staff.
    I can't find its definition right now. Maybe I'll return later with some more information.

    "A welcome takeover is usually referring to a favorable and friendly takeover. Friendly takeovers generally go smoothly because both companies consider it a positive situation. In contrast, an unwelcome or hostile takeover can get downright nasty!"
    http://financial-dictionary.thefreedictionary.com/Hostile+take+over

    http://www.hausarbeiten.de/faecher/vorschau/49378.html

    "Nothing in the proposed Directive would prevent the shareholders of the target company from agreeing defensive measures at the shareholders' meeting during the period of acceptance of the bid. It would therefore be up to the board of the target company to convince the minority shareholders not to accept a hostile bid by a corporate raider. That decision would have to be taken on its own merits and should not be influenced by the personal views of individual board members. "
    http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/00/36&format=HTML&aged=1&language=EN&guiLanguage=fr

    Far from enough, but that's what I can find by far!
     

    cuchuflete

    Senior Member
    EEUU-inglés
    There has been some speculation in this thread which has little to do with English.

    Panj has got it right:
    against the wishes of the existing management.
    . I might rephrase that just a little-- against the wishes of some of the existing senior management.

    What happens after a hostile takeover is almost infinitiely variable. Often times, most managment and staff are delighted. At other times they are disgruntled. The point is that a change in equity ownership and senior management doesn't necessarily lead to any one outcome for employees.
    Ususally there is a period of fear about job security, and within a half year or so it is "business as usual". The same is true in the case of "friendly" takeovers.
     
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