Scorched Earth Policy
What is a Scorched Earth Policy? In finance, a scorched earth policy is a tactic that a company can use to prevent a hostile takeover. Essentially what happens is that a company targeted for takeover does everything it can reasonably do to make itself unattractive, hopefully discouraging the potential acquirer from continuing the takeover attempt....
Godfather Offer
What is a Godfather Offer? A Godfather offer is essentially an offer that is so ridiculously favorable, that to refuse it would be a dereliction of financial responsibility. It most often occurs in the context of mergers and acquisitions, and refers to an offer made by one company to purchase or take over another company....
Dawn Raid
What is a Dawn Raid? A dawn raid refers to the sudden sweeping purchase by a potential acquirer of a substantial number of a target company’s shares the moment the market opens (“dawn”). A dawn raid is typically undertaken by a potential acquiring company in the context of a hostile takeover attempt. Hostile...
Takeover Bid
What is a Takeover Bid? A takeover bid refers to the purchase of a company (the target) by another company (the acquirer). With a takeover bid, the acquirer typically offers cash, stock, or a mix of both, “bidding” a specific price to purchase the target company for. Types of Takeover Bids The four different types...
Flip-In Strategy
What is the Flip-in Strategy? The flip-in strategy is one of the basic types of poison pill strategies that companies use to benefit their shareholders and help defend their company from an unwanted takeover. In the flip-in strategy, the target company – in order to defend itself against a hostile takeover – dilutes the value of...
