Lessons

Post-Offer Defense Takeover Mechanisms

Just Say No: Management can decline an acquirer’s offer and attempt to convince the board that a takeover is not best for the firm.
Greenmail: The target reaches an agreement to repurchase shares from a would be acquirer at a premium.
Litigation: Most effective as a delay tactic, a target can use the court system to contend that a takeover would materially harm the competitive structure of the industry.
Leveraged Share Repurchase: A target may borrow in order to buy shares on the market; this can drive up the price for the acquirer and also increase the risk of the target’s balance sheet. In its extreme form, target company management may use debt to buy all of the shares and take the target company private; this would be a leveraged buyout.
Leveraged Recapitalization: Similar to the leveraged share repurchase, but will leave some equity to trade in the public stock exchange.
White Knight: Target seeks a third party to make the purchase, in order drive the hostile acquirer out of the picture.
White Squire: Target seeks a third party to purchase enough shares in order to prevent full acquisition by a hostile buyer.
Crown Jewel: Target sells off one its top assets in order to make purchase by an acquirer less attractive.
Pac Man: Target flips the script as the target responds by attempting to buy the would be acquirer.

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