What does it mean when a business is involved in a "hostile takeover" of another?

Question

What does it mean when a business is involved in a "hostile takeover" of another?

Answer 1

sounds like a militia is involved...

Answer 2

A "hostile takeover" occurs when a company buys out by another company either by accumulating a controlling amount of shares in the target company or persuading the majority of shareholders to sell or release their existing stakes into the "suitor" business.

These kinds of mergers are done to increase value of the business (acquiring someone else's cashflow for themselves), lifting efficiencies, raising brand awareness and expanding a presence.

Answer 3

As far as i know...

If a company releases a large amount of their shares in the open market.. and another company buys a lot of them from the market and other shareholders and then claims ownership.. thats a hostile takeover...

on a funnier note it could mean them bringing guns and tanks and an army and taking over the premises

Answer 4

I wondered that when I read it also...watch the Yahoo chit fly!!

I always thought it pertained to a company that was in trouble...I didn't think Yahoo was in trouble...who knows though

Answer 5

Short answer:  When a company starts buying up all the stock of the other company, against it's management's will.

Once they have a majority share, (or a big enough minority) they can replace said management at will.

Answer 6

I am not a business student or lecturer - just from my general knowledge I would say it is when a business takes over another business simply to put them out of business.

So if British Home Stores took over Marks and Spencer (in GB) because they are rivals it would mean M & S would probably cease to exist. (The fewer rivals there are in the market place, the less need to compete on prices and services)

Answer 7

It means they (hostile company have approached the shareholders offering a high price for the shares so that the "hostile" company now owns more than 50 percent of the shares so therefore controls the company.  Usually shareholders accept the offer for the quick buck they gain out of it.  Shareholders are not loyal, they just go for the highest offers & don't care who the offer is from.