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What is a hostile takeover and what are the ways to prevent it? Read here 

The term 'hostile takeover' is used when an entity attempts to take control of another company against the wish of its promoters or management.

Companies use several methods, such as a proxy vote or a tender offer, for hostile takeovers.

The target company can use strategies such as the ‘white knight’, ‘poison pill’, ‘crown jewels’, ‘greenmail’, etc. to prevent hostile takeovers.

An example of a hostile takeover is Minda Corporation's attempt to acquire 1,91,40,342 equity shares of Pricol from the public including banks and FPIs.

This move is considered an attempt for hostile takeover since the promoter group of Pricol led by MD Vikram Mohan had earlier rebuffed buyout offers from Minda.

In a proxy vote, the acquiring firm persuades current shareholders of the target company to vote out the company's management so that it becomes easier to take over the company.

A tender offer is an offer to purchase shares from the target company's shareholders at a premium to the market price.

The ‘white knight’ strategy involves finding a friendly company that can take a controlling stake before the hostile entity does.

The ‘poison pill’ strategy involves allowing current shareholders to buy new shares at a discount which will dilute the amount of equity a stakeholder holds.

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What is a hostile takeover and what are the ways to prevent it? Read here

When an entity manages to acquire enough shares to hold a majority stake in the target company against the wish of its management or promoter group, it is called a hostile takeover.

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What is a hostile takeover and what are the ways to prevent it? Read here

When an entity manages to acquire enough shares to hold a majority stake in the target company against the wish of its management or promoter group, it is called a hostile takeover.

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