Question

What is a hostile takeover ? Explain at least two measures to prevent such takeovers.

Answer 1

The A hostile takeover is an attempt to take control of a publicly traded company without the consent or cooperation of the target company's board of directors. The acquirer three methods for such a takeover;

The first is a tender offer, a proxy fight is the second way, and the third way is buying the necessary company stock in the open market.

Stock repurchase (aka self-tender offer) is a purchase by the target of its own-issued shares from its shareholders. It has been used in past by; Unitrin and Unocal v. Mesa Petroleum Co.

Poison pill i.e. is a distribution to the target’s shareholders of the rights to purchase shares of the target at a substantially reduced price to the merging acquirer