Are You Prepared to Defend against a Hostile Takeover? Don’t Panic!

You know what's going to happen soon: The markets will rally. There will be a few false starts, but then there will be a sustained recovery. There's no doubt we're all looking forward to turning that corner but for some companies, predators loom in the distance.


2 July 2009

You know what's going to happen soon: The markets will rally. There will be a few false starts, but then there will be a sustained recovery. There's no doubt we're all looking forward to turning that corner but for some companies, predators loom in the distance. They have been biding their time, waiting for the perfect time to strike, and detailing every aspect of their plan.

Let's say a company has survived the recession, having made hard decisions and hunkering down. Perhaps that company will emerge only to be stalked-to be the target of a hostile takeover attempt. How did they prepare?

Most panic.

The defense: Create a poison pill? Repurchase stock? Spin off a division or two? Attract new bidders?

Hostile TakeoverTo increase the value of their assets, many companies will set up a deal room and populate it with vast amounts of due diligence information. They brief advisors, hit the phones and approach the media, promoting themselves as widely as possible.

But by reacting with such a flurry of activity, these companies are panicking. They know time is short, but there's only so much that can be done in the time available. Twenty-four hours a day is 72 hours a day too little. This job could and should have been done much better if only someone had the foresight to plan ahead.

You have this opportunity - now.

As the corner approaches, your company can turn it with confidence. Proactively plan to defend yourself, the interest of your shareholders and your employees. Do it now by setting up a virtual deal room, regularly update and maintain it, and establish a defense plan. Don't leave it too late and wish you had.