Business Takeover
A business takeover refers to the acquisition of one company by another, typically through the purchase of a majority stake in the target company's shares. This can be achieved through various means, such as a merger, acquisition, or hostile takeover. Business takeovers can result in significant changes in company ownership, management, and strategic direction.
4 Key excerpts on "Business Takeover"
eBook - ePubShares Made Simple
A beginner's guide to the stock market
- Rodney Hobson(Author)
- 2018(Publication Date)
- Harriman House(Publisher)
...Part Five: Takeovers Chapter 21. Mergers and Acquisitions T akeovers are arguably the most exciting aspect of stock market investing because it is one way that investors can make substantial profits in a short space of time. Newspapers love takeovers because they often involve companies with colourful personalities as chief executive – so there is generally plenty of press coverage, which means shareholders can easily keep themselves aware of an y developments. It is quite likely that at some stage you will invest in a company that is subsequently involved in a takeover or a merger (a merger is when two companies join together as equals to become one). This activity is referred to as mergers and acquisitions, more often than not abbr eviated to M&A. Ta keovers may be: Friendly : a friendly bid is where the two sides agree on a price and the target company recommends its shareholders to accept. Hostile : in a hostile bid, the target company tries to fight off the bidder and advises its shareholders to reject the offer. Takeovers and share prices In takeovers, the share price of the target company tends to rise, sometimes even before the bid is announced. This may happen because news of an approach leaks out or because investors sense that a particular company is susceptible to an offer. Since investors privy to inside information can make large profits from buying shares before a bid is announced, the procedure is governed by a strict Takeover Code. Bidders believe that takeovers create the opportunity to increase sales or cut costs, which is why they are usually willing to pay a bid premium – that is, they offer more than the prevailing market price. The share price of a bidding company often falls as its shareholders fret over whether it is paying too high a premium. Although takeovers can happen at any time, they are understandably more prevalent when shares are comparatively cheap...
eBook - ePub- Alan R. Simon(Author)
- 2010(Publication Date)
- For Dummies(Publisher)
...Some deals involve a sale for cash, while others use stock as the financial medium of exchange, as the following sections illustrate. Acquisitions An acquisition is, in most cases, a takeover. One company — the acquirer — is purchasing all of (or at least some of) the company assets of the acquiree, including buildings, equipment, future revenue that is already contracted, and employees. (Yes, in the acquisition world, you and your fellow employees are assets that are being sold by your company to another company.) Almost always, the acquiring company pays a premium on top of the current market value of the acquired company to be able to secure the deal. If the acquired company is publicly held, the premium is usually some price above its current stock price. (For example, the acquired company is trading at $20.00 per share the day before the acquisition occurs, and the acquisition price may be $30.00 per share.) However, if the acquired company is privately held, arriving at that company’s value — and the premium that the acquirer will pay — is a job for the financial pros with MBAs from an Ivy League school or other top-notch business program who work on Wall Street, drive fancy cars, and all that. The Mergers and Acquisitions business from both sides — advising acquirers and target acquirees — can be very lucrative because of the skill and expertise that is required to try to ensure that the acquired company’s owners are getting a fair deal and, at the same time, the acquirer isn’t grossly overpaying. In many cases, the top-level management team of the acquired company bails out following the completion of the deal, courtesy of the golden parachute provisions in their respective employee agreements...
eBook - ePubRebuilding Construction (Routledge Revivals)
Economic Change in the British Construction Industry
- Michael Ball(Author)
- 2014(Publication Date)
- Routledge(Publisher)
...For this reason, takeover activity is a particularly useful means of examining the process of firm change. 1 Takeovers are important for individual firms at specific points in time. For an acquiring firm the takeover is undertaken to speed up growth, stabilise a market position or avert a threatened decline in turnover and/or profitability. For an acquired firm, it is specific historic circumstances that make them objects of takeover. The company, for instance, could be in temporary financial difficulty or have size constraints to further growth; both may be overcome by merger with a larger organisation. The existence of such economic pressures results from the position of the firm within an industry, the overall state of that industry, and the general level of economic activity. The direction of causality, however, is not one way. The possibility of takeover itself affects the accumulation process for individual firms. Mergers should be seen as only one possible response to specific problems or constraints. An examination of merger activity therefore increases the understanding of the nature of capital accumulation in construction. The following argument and empirical evidence is divided into two main sections. The first considers why construction firms are involved in takeover activity; the second then looks at the actual incidence of takeover activity by examining the aggregate pattern of acquisitions from 1960 onwards. Why do construction firms take-over and merge? The nature of the construction industry limits the range of potential advantages to be achieved from acquisitions. For this reason diversification plays a dominant role, and the level of takeover activity is closely linked to the state of aggregate and sectoral demand for construction work. Economies of scale in production are a much vaunted advantage of mergers, yet they are of little relevance in construction...
eBook - ePubMergers and Acquisitions Basics
All You Need To Know
- Donald DePamphilis(Author)
- 2010(Publication Date)
- Academic Press(Publisher)
...Chapter 3. Developing Takeover Strategies and the Impact on Corporate Governance Hollywood dramatizes the motivation for corporate takeovers as “excessive greed.” The press often portrays them as “job destroyers.” From other quarters, corporate takeovers are hailed as a way to dislodge incompetent management. Shareholders often hail them as a source of windfall gains. The reality is that corporate takeovers may be a little of all of these things. Hollywood dramatizes the motivation for corporate takeovers as “excessive greed.” The press often portrays them as “job destroyers.” From other quarters, corporate takeovers are hailed as a way to dislodge incompetent management. Shareholders often hail them as a source of windfall gains. The reality is that corporate takeovers may be a little of all of these things. A number of tactics are commonly used to acquire a company, including bear hugs, proxy contests, and hostile tender offers; they may be more or less effective, depending on circumstances. The “corporate takeover markets” in which these tactics are employed serve two important functions in a free market economy. First, such markets facilitate the allocation of resources to sectors of the economy in which they can be used most efficiently. Second, they serve as a mechanism for disciplining underperforming corporate managers. When hostile takeover attempts or proxy fights succeed in replacing such managers, they help encourage corporate governance practices that promote corporate stakeholder rights. Corporate Governance What is corporate governance ? The common definition is fairly straightforward; the term refers broadly to the rules and processes by which a business is controlled, regulated, or operated. There is, though, no universally accepted goal for corporate governance. Traditionally, the goal has been to protect shareholder rights...
