Takeover Intentions and Takeover Defences-A brief study
Corporate takeovers play an important role in the economy. However, unlike standard market transaction, they could lead to hostility as the target company often resist the attempt of takeover by the acquirer. While the target company often adopt strategies to resist the attempt of takeover by the acquirer, the acquirer does everything possible to counter the prevention strategies of the target. The target adopts strategies that potentially increases cost of acquisition far above the prevailing market price of the firm and sometimes deter efficient transfer of control.
It is often proclaimed that the intention of antitakeover tactics is to benefit the shareholder, but the regulators and practitioners believes that the antitakeover act benefit the inside at the cost of shareholder. The shareholders generally go by the opinion of the manager as they believe that managers are in a better position to evaluate the takeover offer.
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