How does a hostile takeover of a company work?
In: 0
I want to take over XYZ Corp because I think they’re mismanaged. I start buying a significant number of shares of the company to gain a foothold (say 5%) and demand the changes I think necessary, ask for a board seat, etc.
If that’s rejected, keep buying up more shares while starting to talk/negotiate with other large shareholders — perhaps a co-founder who has left, or a family of founders, etc. but typically it’ll be institutional investors like Vanguard, Fidelity, perhaps some Hedge Funds, etc.
With 50% of share ownership aligned, they can take over the company and make the changes. Sometimes it doesn’t even take that to enact change… just getting 30% or so in alignment is enough for board to push our CEO or make other changes w/out an actual takeover happening.
Latest Answers