Pac-Man Defense

A defensive tactic used by a targeted firm in a hostile takeover situation. In a Pac-Man defense, the target firm turns around and tries to acquire the other company that has made the hostile takeover attempt. This term has been accredited to Bruce Wasserstein, chairman of Wasserstein & Co.

This term comes from the Pac-Man video game. In the game, once Pac-Man eats a power pellet he is able to turn around and eat the ghosts that are chasing after him in the maze.

When one company makes an unsolicited and aggressive bid on another publicly traded company, the takeover attempt may not be welcomed by the targeted firm. In an attempt to scare off the would-be acquirers, the takeover target may use any method in an attempt to acquire the other company, including dipping into its war chest for cash to purchase the other company's stock.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Pac-Man defense — The Pac Man defense is a defensive option to stave off a hostile takeover in which a company that is threatened with a hostile takeover acquires its would be buyer.The most quoted example in U.S. corporate history is the attempted hostile… …   Wikipedia

  • Pac-Man defense — /pak man / a defensive tactic against a hostile takeover in which the targeted company makes its own bid to take over the hostile firm. [1980 85; after Pac Man, a character in a video game that devours its attackers] * * * Pac Man defense «PAK… …   Useful english dictionary

  • Pac-Man defense — /pak man / a defensive tactic against a hostile takeover in which the targeted company makes its own bid to take over the hostile firm. [1980 85; after Pac Man, a character in a video game that devours its attackers] * * * …   Universalium

  • Pac Man defense — Fin avoiding purchase by making an offer to buy the prospective buyer …   The ultimate business dictionary

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  • Pac-Man strategy — Takeover defense strategy in which the prospective acquiree retaliates against the acquirer s tender offer by launching its own tender offer for the other firm. The New York Times Financial Glossary takeover defense strategy in which the… …   Financial and business terms

  • Pac Man — A form of defense used in a hostile takeover situation. The target firm turns around and tries to take over the company that has made the hostile bid. Just think all those years of playing Atari games could save a company someday …   Investment dictionary

  • Pac-Mandefense — Pac Man defense (păkʹmăn ) n. A stratagem used to prevent a hostile takeover, by which the target company tries to acquire the bidder.   [After Pac Man, trademark for a video game in which a character gobbles up its opponents.] * * * …   Universalium

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