Hostile Bid (or Hostile Takeover)

A hostile bid or hostile takeover refers to a takeover offer by a company, private equity firm or investor group that has been rejected by the target company’s board and where the acquiring group attempts to buy shares in the open market at the same time as approaching shareholders, specifically key or reference shareholders, with a time-limited tender offer at a premium that targets a majority of shares to vote for the takeover. Hostile bids will typically be accompanied by specific plans to restructure the business, create synergies and create additional value for shareholders.