PDSnet Glossary

Term

Categories

Introductory Technical Fundamental Economics Opinion Sectors International Regulatory Other Markets

Versions

Name	synonyms = 1, variations = 2, abbreviations = 3

Publish: (0 = no, 1 = yes)

Definition

A takeover which is opposed by the board of directors. The acquiring company approaches the shareholder directly despite the fact that the directors oppose the takeover. The only grounds on which the directors can oppose the deal is that it undervalues the business. Directors are often aware that if the deal goes through then they may lose their positions as the new controlling shareholder will seek to appoint its own board - especailly if the takeover has been opposed by the original board. Hostile takeovers are obviously more difficult than those which are approved by the board. The board is obliged to make shareholders aware that they have received a substantive offer for the business.

Edit Glossary Term