Hostile Takeover – when losing is winning
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It was interesting to learn how Cadbury ultimately ended up in a deal with Kraft that their shareholders wanted, even though it started out as a hostile situation which was personally and professionally upsetting to so many. Cadbury’s smart tactics turned a bad situation into something that was ultimately good for its shareholders, which is ultimately the people to whom they are accountable. However, the company and brand were sentimental and had deep roots in the national and local history. Does anyone think there’s a time when a company should continue to fight a takeover even if their shareholders become convinced the deal should go through?
Very much depends on the circumstances when deciding whether a company should continue to fight a takeover even if their shareholders become convinced that the deal should go though – if the deal is absolutely necessary to ensure the survival of the company moving forward, the company should perhaps not fight a takeover; however, on the other hand, if the company directors are convinced that it is indeed the best interests of the company’s stakeholders (including the shareholders), then efforts should be directed at ensuring that the shareholders are made aware of the advantages and disadvantages of such pursuits. After all, the best interests of the stakeholders – including the employees, shareholders and the company itself – are of paramount importance.
That will be very challenging for the management.
But, I believe the key here is if the management believes that the company’s future with the current owners is better than with the acquirers, even if they offered a great offer.
The areas that the company need to focus on are business plan, future investments, current experience and future owner capabilities.
According to your post, the hostile takeover is not good at any relation and any place. so I advice at anyone avoided all these thing related this.
Ideally, management should be balancing the interests of shareholders, employees, and customers. At the end of the day shareholders are key stakeholders.
In reality, there are plenty of examples where it’s evident that management undertook a defensive course for self-preservation – and not for creating value for shareholders.
In cases, where management understands that the acquirer intends -or- is likely to dramatically break apart, spin-off business operations which will negatively impact shareholders, customers, and employees, I believe they have the right to stand up and take defensive action.
If management can keep their focus on creating shareholder value, respecting their employees and customers, they shouldn’t worry about a takeover wherein the terms are shown to be favorable to shareholders, employees, and customers.
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