What is a hostile bid?
A takeover bid by one company for another, in which the directors of the target company oppose the bid. Their opposition may be temporary – in effect, a negotiating ploy to encourage a better offer from the bidder – and hostile bids can turn ‘friendly’ after a period of public posturing. Some countries, and indeed some companies, are more accepting of hostile takeovers than others. American and British companies tend to consider them part of the cut and thrust of public status, whilst Continental European and Asian business consider them very bad form even if they are unable to prevent them. Friendly and hostile takeovers When a bidder makes an offer for another, it will usually inform the board of the target beforehand. If the board feels that the value that the shareholders will get will be greatest by accepting the offer, it will recommend the bid. Otherwise it will reject it and the bid will become hostile. If the bidder makes the offer without informing the board beforehand, the o
