2oii0r2017 Hoste Bis Hostile Bid DEFINITION of ‘Hostile Bid" Aspecifictype of takeover bid thats presented directly tothe target firm's shareholders because the target's managements notin favor ofthe deal. A hostile bd is usually presented through a tender offer, under which the acquiring company offers to purchase the common shares ofthe target ata ‘substantial premium. Simply put, a hostile bidi the bid offered in a hostile takeover. BREAKING DOWN ‘Hostile Bid" Hostile bids can mean major changes forthe organizational structure Despite target management ‘objections, shareholders face a situation similar to a prisoners dilemma, where only those that ‘accept the tender are guaranteed to enjoy the premium pric. Ifthe board pursues defensive action tostop the merger, a proxy ight can occur where the acquirer will often attempt to convince the target shareholders to replace management. The only back to school supply you really need... {cel for Finance: slt-paced online courses to hone your sills. Courses tart at just $19.95, Watch freetraier>> Takeover Bid [takeover bd isa type of corporate action in which an acquiring company makes an offer tothe target company's shareholders to buy the target company’s shares in order to gain control ofthe busines, Takeover bids can eltherbe friendly or hostile. BREAKING DOWN "Takeover Bid’ ‘Some examples of takeover bids include: “Two-Ter Bid: The acquiring company i willing to pay a premium above and beyond the share's price in order to convince shareholders to sell thelr shares. Any-and-ali specific price, 1 acquiring company offers to buy any of the target firm's outstanding shares ata hitp:lwwwinvestopedia.comtermsihvhostle-bie.asp 1220/0/2017 Serchrnatoped ITuBRARY SocSindbtr Pade GamPep Quer NeW Caer (©2017 Ieopeda LLC. ghee | TemsOf ike | Piney Pey hitp:lwwwinvestopedia.comtermsihvhostle-be.asp Hoste Bis KLM 22