Prepared by: Komal Parekh Dhara Thakkar Ankit Padhiyar Bharat Gangwani

A "hostile takeover" allows a suitor to take over a target company whose management is unwilling to agree to a merger or takeover. A takeover is considered "hostile" if the target company's board rejects the offer, but the bidder continues to pursue it, or the bidder makes the offer directly after having announced its firm intention to make an offer. A hostile takeover can be conducted in several ways. 1) Tender Offer 2) Bear Hug 3) Dawn Raid 4) Proxy Fights

The tender offer is a public, open offer or invitation (usually announced in a newspaper advertisement) by a prospective acquirer to all stockholders of a publicly traded corporation (the target corporation) to tender their stock for sale at a specified price during a specified time, subject to the tendering of a minimum and maximum number of shares. An offer to purchase some or all of shareholders' shares in a corporation. The price offered is usually at a premium to the market price.

Governing law In the United States, tender offers are regulated by the Williams Act. SEC Regulation 14E also governs tender offers. It covers such matters as: 1) The minimum length of time a tender offer must remain open 2) Procedures for modifying a tender offer after it has been issued 3) Insider trading in the context of tender offers 4) Whether one class of shareholders can receive preferential treatment over another

An offer made by one company to buy the shares of another for a much higher per-share price than what that company is worth. A bear hug offer is usually made when there is doubt that the target company's management will be willing to sell. The name "bear hug" reflects the persuasiveness of the offering company's overly generous offer to the target company. By offering a price far in excess of the target company's current value, the offering party can usually obtain an agreement. The target company's management is essentially forced to accept such a generous offer because it is legally obligated to look out for the best interests of its shareholders.

When a firm or investor buys a substantial number of shares in a company first thing in the morning when the stock markets open. Because the bidding company builds a substantial stake in its target at the prevailing stock market price, the takeover costs are likely to be significantly lower than they would be had the acquiring company first made a formal takeover bid. Like the dawn raid in war, the corporate dawn raid is done early in the morning, so by the time the target realizes it's being attacked, it's too late - the investor has already scooped up some controlling interest. However, only a minority interest in a firm's shares can be bought this way. So, after a successful dawn raid, the raiding firm is likely to make a takeover bid to acquire the rest of the target company.

A proxy fight is an attempt by a single shareholder or a group of shareholders to take control or bring about other changes in a company through the use of the proxy mechanism of corporate voting. A proxy fight occurs when the acquiring company attempts to convince shareholders to use their proxy votes to install new management that is open to the takeover. The technique allows the acquired to avoid paying a premium for the target. Not all interested stockholders find it possible to attend the stockholders meeting to execute their votes. shareholders may authorize another person to vote for them and to act as their proxy. Most corporate voting is done by proxies.

Types of Proxy Contests:

1.Contests for seats on the board of directors 2.Contests about management proposals

Characteristics of Proxy Contests

1. Insufficient voting support for management 2. Poor operating performance 3. Sound alternative operating plan

1.

Meeting for change the control, sale of the firm, or the installation of certain antitakeover defense. Hired proxy solicitor to convince other shareholder.

Starting the Proxy fight

2. 3.

The solicitation Process The Voting Process

Voting Analysis

Share Controlled by insurgents and shareholder groups unfriendly to management Share controlled by directors, officers, and employee stock ownership plans Share controlled by institutions. Share controlled by brokerage firms. Share controlled by individual.