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Killer Bees

Companies or individuals that assist a company in avoiding a hostile takeover

What are Killer Bees?

In the mergers and acquisitions landscape. Killer bees refer to companies or individuals that assist a company in avoiding a hostile takeover. They are much like white knights; the difference is perhaps only one of degree or behavior. Killer bees typically act very aggressively with the hostile takeover defenses they employ.


Killer Bees



  • Killer bees help takeover targets in avoiding a hostile takeover
  • They typically use very aggressive takeover defense tactics
  • A killer bee may be an individual such as an attorney, a firm, or an investment bank

The Nature of Killer Bees

The precise nature of a killer bee can vary widely. A killer bee may be anything from a single individual to an attorney or law firm, an accountant, a consulting firm, or an investment bank.

Whatever form the killer bee comes in, its sole purpose is to devise and help execute a scheme that enables a target company to escape a hostile takeover. They aim to either make the takeover target either prohibitively difficult and expensive to acquire or to render it so unattractive that the potential acquirer loses interest in pursuing the takeover.


Killer Tactics

The takeover defense tactics used by killer bees are determined by their assessment of the specific takeover situation they are confronted with. In short, they employ whatever takeover defense they deem most likely to succeed.

A second consideration is that of helping the takeover target company survive the hostile takeover attempt while suffering the least amount of expense or damage. However, the secondary consideration runs a distant second to the primary goal of thwarting the takeover.


1. Pac-Man Defense

One popular anti-takeover strategy of killer bees is the “Pac-Man Defense.” The Pac-Man Defense is a particularly aggressive takeover defense strategy, in which the target company attempts to turn the tables on its potential acquirer.

As the acquirer is attempting to buy up a controlling interest in the target company, the target begins employing the same strategy against the aspiring acquirer – buying up its shares, aiming to gain a controlling interest. Faced with the threat of losing control of its own destiny, the acquirer may back off and abandon its hostile takeover attempt.


2. People Poison Pill

Another extreme strategy that may be recommended by a killer bee to a takeover target is that of the “People Poison Pill.” In such a strategy, the killer bee advises the target company to amend its corporate charter to require the resignation of all key managing individuals in the event of a hostile takeover. It can be a very effective strategy if the takeover company employs several key individuals who are considered vital to its ongoing success.

For example, a software firm’s head of product development, who has been responsible for the creation of all its major products, may be considered indispensable for its successful operation. Faced with the loss of such individuals and the prospect of having to form an entirely new management team that is unfamiliar with the target company’s business, the acquirer may decide it no longer sees the takeover target as desirable.


Additional Resources

CFI offers the Financial Modeling & Valuation Analyst (FMVA)™ certification program for those looking to take their careers to the next level. To keep learning and advancing your career, the following resources will be helpful:

  • Black Knight
  • M&A Considerations and Implications
  • Pre-Offer Defense Mechanism
  • Post-Offer Defense Mechanism

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