Hostile Bid

A specific type of takeover bid that is presented directly to the target firm's shareholders because the target's management is not in favor of the deal. A hostile bid is usually presented through a tender offer, under which the acquiring company offers to purchase the common shares of the target at a substantial premium. Simply put, a hostile bid is the bid offered in a hostile takeover.

Hostile bids can mean major changes for the organizational structure. Despite target management objections, shareholders face a situation similar to a prisoners' dilemma, where only those that accept the tender are guaranteed to enjoy the premium price. If the board pursues defensive action to stop the merger, a proxy fight can occur where the acquirer will often attempt to convince the target shareholders to replace management.


Investment dictionary. . 2012.

Look at other dictionaries:

  • hostile bid — noun (commerce) A bid not welcomed by the company whose shares are to be bought • • • Main Entry: ↑hostile …   Useful english dictionary

  • hostile bid — Any offer not made pursuant to an agreement with the target. Related links stakebuilding recommended bid Rule 3 adviser Practical Law Dictionary. Glossary of UK, US and international lega …   Law dictionary

  • hostile bid — A takeover bid by one company for another, in which the directors of the target company oppose the bid. London Stock Exchange Glossary * * * hostile bid hostile bid ➔ bid1 * * *    A bid for a company that is not supported by the senior… …   Financial and business terms

  • hostile bid — See: agreed bid …   Accounting dictionary

  • hostile bid — A takeover bid that is unwelcome either to the board of directors of the target company or to its shareholders …   Big dictionary of business and management

  • hostile bid — Fin a takeover bid that is opposed by the target company. See also greenmail, knight …   The ultimate business dictionary

  • hostile — hos‧tile [ˈhɒstaɪl ǁ ˈhɑːstl, ˈhɑːstaɪl] adjective FINANCE a hostile bid or takeover is one in which a company tries to buy another company whose shareholder S do not want to sell: • They ve managed to fight off a hostile takeover bid. * * * …   Financial and business terms

  • bid — An expression indicating a desire to buy a commodity at a given price, opposite of offer. Chicago Board of Trade glossary The request to buy a futures contract at a specified price; the opposite of offer. The CENTER ONLINE Futures Glossary bid or …   Financial and business terms

  • hostile bidder — /ˌhɒstaɪl bɪdə/, hostile suitor /ˌhɒstaɪl su:tə/ noun a person or company making a hostile bid …   Dictionary of banking and finance

  • hostile — hos·tile adj 1: having an intimidating, antagonistic, or offensive nature a hostile work environment 2 a: of or relating to an opposing party in a legal action a hostile claim b: adverse to the interests of a party to a legal action if the… …   Law dictionary

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