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This section appears horribly NPOV and misinformed. Takeovers are a huge business for law firms and investment banks in all the countires mentioned. I seriously doubt that this section is accurate. A quick glance at the M&A article shows that all major European and Multi-national mergers involved French companies... I've moved France in the "readily occur" list, but I think this section needs significant improvement.Sprotch 12:24, 24 October 2006 (Kaduna)]
In the UK the terms "takeover" applies to the acquisition of public companies with listed shares. It is not technically used for private acqisitions (though it is sometimes heard in general parlance). Is a similar distinction made in the US and other jurisdictions, or does the term cover private acquisitions as well? Arthur Markham 19:09, 22 October 2006 (UTC)
I believe this article should go over some of the corporate legal mechanics of takeovers in general.
- In a takeover bid, if the board of directors (of the target company) agrees to the bid by majority vote, does that mean that all individual shareholders (target company) must comply with the terms of the takeover and sell their shares to the acquiring company/trade their shares in for the new merged company shares?
- If a group of large shareholders who together have majority voting control disagree with the board, can they fire the board after the takeover agreement and before the takeover goes through, or are they still compelled by the agreement?
I might be mistaken, but I believe laws such as the 1968 Williams Act cover this area in the US.
Sometimes a company has tax loss carryforwards that will expire soon. If the company is not earning a profit which it can offset with the tax loss carryforwards, it may be taken over by a profitable company that can use the carryforwards. This is another motive for a takeover.
(AM's comments begin here...) In reply to those points, I can only go on UK law but I believe it is much the same:
- Shareholders do not have to sell simply because the board approves. Board approval means that the target executives will help the bidder in its due diligence and banks will be happier to finance the buyer. The board has no power whatsover to make shareholders sell their property.
- A majority of shareholders can fire and replace the board at any point they like if they convene a shareholders meeting to do so. I don't know what the takeover agreement that you refer to is, but the only one that can be binding is between the shareholders and the bidder, and if a majority of the shareholders are against the idea then they won't have agreed to sell.
Arthur Markham 19:07, 22 October 2006 (UTC)
- A hostile takeover can usually only occur for a company that is listed on a stock exchange. Stock = voting rights, including the right to elect a new board of directors. The board members themselves usually hold a great deal of stock, but not the 50%+1 shares necessary to dictate a new board. The "acquirer" makes an offer for the "target's" stock in the public market at a rate well above the market price. If a sufficient quantity of stock is purchased, the "acquirer" now for all intents and purposes now dictates the operations of the target. Schoop (talk) 17:05, 21 April 2008 (UTC)
- I agree. We need more information on the mechanics of a hostile takeover. That is specifically why I came to this article. But I won't flesh it out because I still don't understand. It would be very kind of someone with solid knowledge in this area to help improve the article. ~ Rollo44 (talk) 00:20, 29 April 2008 (UTC)
A little dubious??
I quote the the article: "An acquiring company could decide to take over a competitor not only because the competitor is profitable, but in order to eliminate competition in its field and make it easier, in the long term, to raise prices. Readers may note that in most countries there are laws against uncompetitive practices, especially those that seek to eliminate competition in a certain way. Takeovers and mergers that are uncompetitive or that seek to obviously eliminate competition WILL NOT be permitted by the nation's competition regulator. The sentence is a little misleading in this respect, but so long as the above sentence complies with the legal requirements, such a takeover (one that helps eliminate competition to raise prices) will be ok - but in almost all cases where competition is eliminated to create monopolistic situations (this is where only one or two guys are in the market, so then they can set high prices b/c there is no other sellers to force these one or two guys to offer sales and discounts etc.), the regulator will disallow such mergers/takeovers.
I don't quite agree. Authorities will only move against eliminating competitors through takeovers if there is a danger that one (or a few) may move towards a monopolistic situation. While there are enough sharks in the pond, they may eat each other. The phrase "eliminate competition" if read as meaning "all competition in the market" would indeed invoke the things you cited, but what was probably meant is eliminating competition from that particular company or in their particular market niche. Having fewer competitors makes raising prices easier long before authorities step in. So I'd vote for keeping that part as it is. Lisa4edit
I'm working on a bit of fiction. Might not come to anything but there is a bit that includes a European takeover of a listed company. I know very little about business and have a few questions about how things might play out in a situation. Anyone who would be willing to write back and forth on the topic would be great to hear from. I'm firstname.lastname@example.org
"Trigger" is listed in the "Tactics against hostile takeover" section, but, at the moment, only links to the disambiguation page for the word. Is there a more specific article on "Trigger" as it applies to business takeovers? If so, it should be on the Trigger page and linked from this article. If not, either one should be written, or this link should be deleted. Thanks! Tevildo 13:04, 13 June 2006 (UTC)
80 percent/30 percent?
In the section Financing a Takeover:Cash, it says "The debt ratio of financing can go as high as 80% in some cases. In order to then acquire a company, you actually need to finance only 30% of the purchasing price." Shouldn't that read "...you only need to finance 20%..."? Or am I missing something?
The Reverse Takeovers section is a bit strange. First, it misstates the nature of AIM rules, which are not the "London Stock Exchange rules for companies", but the rules for companies listed and traded in the AIM, which is a specific sub-market of the London Stock Exchange. I corrected that bit, but the section still contains information which is not present in the main article to which it refers (Reverse takeover), and which is specific to a specific segment of the stock market of a single country. It also stops in the middle
The information on AIM rules should probably be moved to the Takeovers in the United Kingdom section, and the Reverse Takeovers section should be rewritten to summarize the information from Reverse takeover.
It seems to me that the External Link listed as "Acquisition Financing" is an advertisement for a company called "Attract Capital." I am not sure how the non-commercial guidelines relate to this, since the link also seeks to instruct people about what its services entail. Time River (talk) 00:58, 6 July 2009 (UTC)
Intro paragraph please
this interesting area lacks a concise over view paragraph in the introduction
"Tactics against hostile takeover" restructuring
I have taken it upon myself to restructure this section. In some cases there were redirects to strategies already in the list, in others they're a type of Poison pill strategy. I moved all the ones that list poison pill in the lead paragraph under poison pill heading and moved poison pill to the head of the list because it balances the lists better in addition to making the most notable (and one people are coming to read about) be at the top of the list. Please discuss prior to reverting by reaction. Hasteur (talk) 15:51, 29 July 2014 (UTC)