Hostile takeovers can be a high-risk business that leaves a lasting impression the corporate landscape. The company that is buying the company tries to take over the target company in defiance of the wishes and desires of the board. Hostile takeovers, despite their escalating drama and public nature virtual data rooms aren’t as frequent as they were in the past.
During the 1980s there were 160 hostile takeover bids. Board members lived in fear from “corporate raiders”, such as Carl Icahn. These events were widely covered, leading to lengthy and mudslinging talks.
An example of this is the acquisition of Cadbury in 2009 by Kraft Foods Inc. It was the most hostile acquisition in the history of the world and employees in the UK were outraged at the possibility of losing their jobs. Cadbury’s management was against the offer as it was an unqualified bid. In the end, however, Kraft sweetened the offer and acquired the confectionery giant.
Another noteworthy case is the acquisition by KKR of Airgas in 2010. It was a hostile takeover of an industrial gas supplier and was one of the largest leveraged buyouts of the past. The media coverage grew intense, and the deal ended up in a lengthy legal battle.
Elon Musk’s acquisition Twitter in 2022 is one of the more recent examples. This was an unpopular takeover that required the use of an anti-poison pill defense that resulted in turbulent negotiations and major policy changes after the acquisition. This was an example where an acquisition that was strategic was able to weather the hostile takeover battle. It demonstrates how crucial it is to have a well developed strategy to fight off unwanted offers.
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