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a large block of stock is held by an unfriendly company. This forces the target company to repurchase the stock at a substantial premium to prevent a takeover. It is also known as a "bon voyage bonus" or a "goodbye kiss". start learning
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An agreement made between a company planning a takeover and a bank, which prevents the bank from financing any other potential acquirer's bid. start learning
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The target firm issues a large amount of shares at below-market prices, which the acquiring company will then have to purchase if it wishes to complete the takeover. start learning
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The company issues a large number of bonds with the condition they must be redeemed at a high price if the company is taken over. start learning
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In this, the company passes a provision preventing anyone with more than 10% ownership from converting convertible securities into voting stock. start learning
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A highly leveraged takeover that, to go through, requires a selling off of some of the acquired company's assets. start learning
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the target company attempts to make its stock less attractive to the acquirer. There are two types of poison pills: start learning
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allows existing shareholders (except the acquirer) to buy more shares at a discount. start learning
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allows stockholders to buy the acquirer's shares at a discounted price after the merger. start learning
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the target company engages in an activity that might actually ruin the company rather than prevent the hostile takeover. Also known as a "suicide pill." start learning
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A stalling tactic used by management to deter a company that is showing interest in taking them over. start learning
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a slang term used to refer to a surprise takeover attempt start learning
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An anti-takeover strategy that a firm undertakes by liquidating its valuable and desired assets and assuming liabilities in an effort to make the proposed takeover unattractive to the acquiring firm. start learning
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any one of a number of measures taken by a company to fend off an unwanted or hostile takeover attempt. start learning
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A form of defense used in a hostile takeover situation. The target firm turns around and tries to take over the company that has made the hostile bid. start learning
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Management threatens that, in the event of a takeover, the entire management team will resign. This is a variation of the poison pill defense. start learning
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A company that is prime for takeover, but has not yet been approached by an acquiring company. start learning
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A defensive strategy by which a target company engages in an activity that might actually ruin the company rather than prevent the hostile takeover. Also known as the "Jonestown Defense." start learning
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a legal barrier to a takeover attempt that is virtually impossible for the suitor to overcome. For example, a target company might convince state legislators to pass various antitakeover laws that would preclude the takeover start learning
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a third party poses as a white knight to gain trust, but then turns around and joins with unfriendly bidders. start learning
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A company that makes a friendly takeover offer to a target company that is being faced with a hostile takeover from a separate party. start learning
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A company that makes a hostile takeover offer on a target company. start learning
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A second, unsolicited bidder in a corporate takeover. A gray knight enters the scene in order to take advantage of any problems between the first bidder and the target company. start learning
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Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in the target firm. start learning
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A company that was once making a takeover attempt but ends up discussing a merger with the target company. start learning
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A merger or company sale where one company involved in the deal gives the other very attractive terms and conditions start learning
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