What are some defensive tactics that firms can use to resist hostile takeovers?

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What are some defensive tactics that firms can use to resist hostile takeovers?

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What are some defensive tactics that firms can use to resist hostile takeovers?

Explanation & AnswerSolution by a verified expert

Explanation

Companies can defend themselves from an unwanted acquisition by employing one or more tactics that seek to make themselves less desirable financially, unavailable for purchase, or more difficult to acquire.

Verified Answer

Firms can defend themselves against unwanted acquisitions in numerous ways, including:

Amending their bylaws to require as much as a 75% approval by directors to be acquired or merged
Purchasing their own stock in the open market to raise the price
Raising antitrust objections if applicable
Appealing to their stockholders that the price being offered is too low
Finding a friendly ally (white knight or white squire) who can purchase some or all of the company's stock to block an unwanted suitor from acquiring control
By adopting a poison pill of some kind to make themselves financially undesirable to another company

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