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Hostile takeovers are an extremely risky occasion that can leave an imprint on the corporate landscape. They involve an acquiring company trying to acquire the target firm against the wishes of the board and management. Despite their dramatic nature and public appearance hostile takeovers aren’t as prevalent as they once were.
During the 1980s, there were more than 160 hostile takeover bids that were not solicited and board members lived in fear of “corporate raiders” such as Carl Icahn. These events were widely covered, leading to lengthy and mudslinging talks.
One of the most notable instances was the acquisition of Cadbury by Kraft Foods Inc in 2009. It was the biggest hostile acquisition ever made and employees in the UK were outraged at the possibility of losing their jobs. Cadbury’s management was against the deal as it was considered to be low-value for the firm. Kraft increased its offer and eventually acquired the confectionary giant.
Another notable case is the acquisition by KKR of Airgas in 2010. It was a hostile takeover of an industrial gas supplier and represented one of the largest leveraged buyouts in the history of the period. The media frenzy grew and the deal ended in a lengthy legal dispute.
Elon Musk’s acquisition Twitter in 2022 is an earlier example. This was an acquisition that was hostile and required the use of an anti-poison pill defense that resulted in tumultuous negotiations and massive policy changes post-acquisition. This was a case of a strategic acquisition that was able to weather the hostile takeover battle showing how important it is for the target firm to have a properly-planned strategy to fend off unwanted offers.