Every group is potentially subject to takeover. There will be a price at which the shareholders may be induced to sell their shares. If the bid is received, then the directors may consider and recommend accepting the offer to the shareholders. A problem arises when a publicly quoted company receives an unwelcome bid with a clear objective of buying the group at a price below the value that the management put on it. How to defend against hostile takeover - Strategies Pac-Man defence A defensive tactic used by a targeted firm in a hostile takeover situation. In a Pac-Man defence , the target firm turns around and tries to acquire the other company that has made the hostile takeover attempt. This term has been accredited to Bruce Wasserstein, chairman of Wasserstein & Co. Poison Pill The target company attempts to make its stock less attractive to the acquirer. There are two types of poison pills: 1. A "flip-in" allows existing shareholders (except the acquirer)
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