Fair Price Amendment
What is a Fair Price Amendment? A fair price amendment is a provision contained in a public company’s charter that requires potential acquirers of the company to pay “a fair price” in order to acquire shares held by the company’s stockholders. The formula for calculating the fair market price that bidders should pay is provided...
Bear Hug
What is a Bear Hug? A bear hug is a hostile takeover strategy where a potential acquirer offers to purchase the stock of another company for a much higher price than what the target is actually worth. The acquirer makes a generous offer to acquire the company at a price that exceeds what other bidders...
Motives for Mergers
What are the Different Motives for Mergers? Companies pursue mergers and acquisitions for several reasons. The most common motives for mergers include the following: 1. Value Creation Two companies may undertake a merger to increase the wealth of their shareholders. Generally, the consolidation of two businesses results in synergies that increase the value of a...
Lobster Trap
What is a Lobster Trap? A lobster trap is a strategy that target companies utilize in the event of a hostile takeover attempt. The strategy involves the use of a charter issued by the target company with a directive that prevents shareholders with more than 10% of convertible securities – which includes warrants, convertible bonds,...
Cash Offer
What is a Cash Offer? A cash offer refers to an all-cash offer made by a purchaser to the seller of a real estate property. The purchaser does not need a mortgage or any other type of financing to complete the transaction and is willing to pay cash to close the transaction. A cash buyer...
