Hostile Language

Here are some common terms in the hostile takeover game:

Poison pill: A move by a company to make its stock less attractive to an unfriendly would-be buyer. One strategy is to increase the amount of shares outstanding so as to make the deal prohibitively expensive.

Shark repellents: Other strategies a company can employ, such as changing charters or bylaws or seeking protection under state law, to fight a takeover. Sometimes called “porcupine provisions.”

White knight: A friendly buyer that comes to the rescue of a company that is the target ofa hostile takeover attempt.

Scorched-earth policy: Last-resort techniques used by a company to avoid a takeover. For instance, a company could sell the assets most attractive to a hostile bidder or arrange for all its debt to come due immediately after a merger.

Bear hug: An approach by a potential buyer, typically in a letter to a company, so lucrative as to force the unwilling target firm’s management and board to consider its proposed offer--or risk shareholder protest.