Anti Takeover Defences

Anti takeover defences are also termed as anti takeover tactics. There are a number of anti takeover defences that are applied by the target companies for averting the acquirers or bidders. This is specifically seen in the United States that carries an extensive and diverse history of takeovers.
The anti takeover defences can be broadly categorized into two types and they are the following:

Pre-offer defences
Staggered board
Poison pills
Super majority clause
Golden parachute
Dual class recapitalization

Post-offer defences
Pacman defence
Greenmail
Asset restructuring
Litigation
Liability restructuring

The majority of American companies utilize minimum one anti takeover defence. The two most common anti takeover defences are the poison pill and the staggered board. The staggered board is implemented by approximately 60% of the big corporations for forbidding a bidder from altering the total board according to its choice. The poison pill is utilized by approximately 50% of the important institutions and this causes a firm to become a target costly to a prohibitive degree.

In India, the companies are able to access lesser anti takeover defences in comparison to the American companies. For the purpose of preventing a takeover effort, the Indian companies currently adopt the following anti takeover defences:
Effecting creeping enhancement
Making preferential allotment
Selling the Crown Jewels
Amalgamating group companies
Searching for a White Knight

In the United States, the anti hostile takeover defences can be categorized into the following types:
Bankmail
Back-end
Flip-in
Crown Jewel Defense
Golden Parachute
Flip-over
Greenmail
Gray Knight
Killer bees
Jonestown Defense
Lobster trap
Leveraged recapitalization
Macaroni Defense
Lock-up provision
Non-voting stock
Nancy Reagan Defense
Pension parachute
Pacman Defense
Poison pill
People Pill
Safe Harbor
Poison Put
Shark Repellent
Scorched earth defense
Standstill agreement
Staggered board of directors
Targeted repurchase
Suicide pill
Treasury stock
Top-ups
Voting plans
Trigger
White Squire
White Knight
Whitemail

 

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Last Updated on : 27th June 2013

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