How to survive a hostile takeover

Most FDs will go through their career without being targeted by a black knight looking to take over their business. But for some that nightmare can become a reality – when a potential acquirer comes knocking and doesn’t want to take no for an answer. While the experience may not be the most pleasant, there are ways in which the FD can take to the barricades and defend their company.

But what makes a takeover hostile? Perhaps the most famous of all spawned a book and HBO movie, Barbarians at the Gate, dramatising the ‘blood on the carpet’ deal that saw venture capitalist fund KKR drag US cereals giant RJR Nabisco kicking and screaming into a leveraged buy-out. But while the reality of most unsolicited takeovers is a little less dramatic, FDs can expect to have their mettle tested during what can become a stressful and overheated process.

This is an extract from the Finance & Management Magazine, Issue 251, February 2017.

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Since Christian Doherty wrote this article in 2017, he and others have carried out further research into hostile takeovers.

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