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Hostile takeovers are often a high-stakes affair that leaves a lasting impression on the corporate landscape. They involve a company that is buying attempting to take over the company of the target against the wishes of the management and board. Despite their publicity and drama, hostile takeovers are not as frequent as they once were.
During the 1980s there were a total of 160 hostile takeover bids. Board members were in constant fear of “corporate raiders”, such as Carl Icahn. These incidents were widely reported, which led to long and mudslinging negotiation.
One of the most notable instances was the acquisition of Cadbury by Kraft Foods Inc in 2009. It was the largest hostile acquisition ever made and workers in the UK were outraged at the possibility of losing their jobs. Cadbury’s management rejected the offer, arguing that it undervalued the company. Kraft sweetened its offer and eventually bought the confectionery giant.
Another notable case is the purchase by KKR of Airgas in 2010. It was a hostile acquisition of a gas company that was an industrial supplier and represented one of the largest leveraged buyouts in the history of the period. The media frenzy grew and the deal ended up in a lengthy legal battle.
Elon Musk’s acquisition Twitter in 2022 is a more recent example. This hostile takeover entailed the use a poison pill defence and led to a tumultuous negotiation as well as a massive policy shifts following the acquisition. This was a case of a strategic acquisition that was successfully able to withstand the fight against hostile takeovers, demonstrating how important it is for a prospective firm to have a properly-planned strategy to block unwanted offers.
