Definition of Friendly Takeover

What is a "friendly takeover"? What is the definition of a "friendly takeover"?

In a friendly takeover, the management and board of a company agree to a merger/purchase from another company.

In the case of a friendly takeover, management and the board of directors of a company agree to and endorse a potential purchase. The management and board of directors will give their approval and recommend to shareholders that the deal be accepted. If shareholders agree to the deal (and if there are no antitrust issues, etc) then the deal will be finalized.

The opposite of a "friendly takeover"? The hostile takeover.

In a hostile takeover, an entity who wishes to purchase a publicly traded company will bypass management and the board of directors, and instead appeal directly to shareholders.

Most takeover attempts nowadays are "friendly deals", due to the fact that many companies have become savvy when it comes to protecting themselves from hostile bidders.

--

Davemanuel.com Articles That Mention Friendly Takeover :

None