Can someone explain 'hostile takeovers' to me please? - HotUKDeals
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Can someone explain 'hostile takeovers' to me please?

Penny Saver Avatar
6y, 11m agoPosted 6 years, 11 months ago
I just don't understand. If a company is NOT up for sale, how can it be 'taken over'? If it is up for sale, how can an offer to buy be called hostile?

Thanks in advance.
Penny Saver Avatar
6y, 11m agoPosted 6 years, 11 months ago
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#1
buying up the majority of shares ..........very basically
#3
If a company is privately owned (in the hnds of one or two individuals) then it can only be taken over with the agreement of the people who "own" it.

But many companies are in effect owned by their shareholders.

While there may be thousands of small shareholders with only a few shares, there may be some companies or individuals who own millions of shares, maybe 50% of the shares in the hands of just 2 or 3 people.

If you can buy the shares of those 2 or 3 people you may then own over 50% of the company. If you continue buying more you could then own 60%, then 70% and so on.

This is currently happening at Arsenal Football Club, where a Russian billionaire is gradually buying shares, a bit here, a bit there, so he now owns 26% of the club.

The main owners dont want him "in charge" but once he gets to a certain level of shares he may then "own" the club, in effect a hostile takeover.

http://news.bbc.co.uk/1/hi/business/8407723.stm
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#4
hershys are great! their cookies and cream chocy bar is just irresistible..
#5
OK, I understand. Thanks. My next questions is how can you hope to prevent it? Shares are sold at market price, how is it considered to be undervaluing the company?
#6
Inquisitor
hershys are great! their cookies and cream chocy bar is just irresistible..


:w00t:

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