Monday Muddle #19 GODFATHER OFFER An irrefutable takeover offer made to a target company by an acquiring company. Typically, the acquisition prices premium is extemely generous compared to the prevailing market price. Therefore, if the target companys management refuses the offer, shareholders may initiate lawsuits or other forms of revolt against the target company for not performing their fidiciary duty of looking out for the best interests of the shareholders. The offer is even harder for the target companys management to refuse when its stock price has been flat or declining for an extended period of time, as long-time investors would jump at the opportunity to cash out at an elevated price.
Posted on: Mon, 27 Oct 2014 14:23:25 +0000
Trending Topics
Recently Viewed Topics
© 2015