Hostile Takeover

A hostile takeover allows a bidder to take over a target company whose management is unwilling to agree to a merger or takeover. (M-and-A) The party who initiates a hostile takeover bid approaches the shareholders directly, as opposed to seeking approval from officers or directors of the company.[3] A takeover is considered hostile if the target company's board rejects the offer, and if the bidder continues to pursue it, or the bidder makes the offer directly after having announced its firm intention to make an offer. Development of the hostile takeover is attributed to Louis Wolfson.[4] An SEC working paper tracking hostile takeovers from 1965 to 2013 found that such deals accounted for about 40% of total M&A activity in the late 1960s but declined to around 5% by 2013, making them a small share of overall takeover activity by the 2000s.[5][a] Additionally, a study of M&A transactions from 1990-2005 found that approximately 24% of hostile takeovers succeed.