Takeover bids normally happens over corporations with some crown Jewells. One of takeover defenses consists in making target company unattractive for raiders. This strategy can be implemented by several ways. Like selling or spinning off valuable assets, taking serious risky treasury cash management, or with fulfillment of corporate liabilities. Also a defense that pushes to the edge the corporation itself, but may be effective. If all of it is worth the play, that’s the question.

Scorched Earth tactic may be some slight attitude as well. Instead of coordinated actions, closer to some sort of Jonestown Defense, specific and precise move can be made. For example, if what’s all about is a technology developed, there are several ways to bullet proof access to it or not. Ownership of it can be of a third corporation with nothing to do with the original one, at least officially.

A takeover bid may also trigger an acquisition of some minor corporation by the target company. But if by acting this way, the target company inherits indebtness from this minor company, it can make a difference. Or by making a bid, it does can trigger a selling movement of precious assets by the target company. Anyway it’s a confuse defense tectic. Sometimes, board of directors have enough powers to manage like this. But will ever be a controversy against shareholders vote and interest. If this is the right chessmaster move. To be decided also on Courts.

News Reporter