ANTITAKEOVER Meaning and
Definition
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Antitakeover refers to a range of measures implemented by a corporation or its management team to prevent or deter a hostile takeover attempt. A hostile takeover occurs when an acquiring entity, usually through the purchase of shares on the open market or a tender offer, takes over another company against the wishes of its management or board of directors.
In response, the target company may take various steps to defend itself, commonly known as antitakeover measures. These measures are designed to make the company less attractive or more difficult to acquire, giving management more time to evaluate the proposal or seek out alternative options.
Antitakeover measures can include a variety of tactics, such as implementing staggered board terms, poison pills, golden parachutes, issuing additional shares, or employing supermajority provisions that require a higher percentage of shareholder approval for certain decisions. These measures aim to discourage potential acquirers by making the acquisition more expensive, time-consuming, or complicated.
The primary objective of antitakeover measures is to maintain control and independence for the current management team and board of directors. However, antitakeover tactics can be controversial, as they might prioritize the interests of current management over those of shareholders.
It is important to note that antitakeover measures can significantly vary depending on local legal jurisdictions and corporate governance practices, as different regulations may allow or restrict certain defensive strategies.
Etymology of ANTITAKEOVER
The word "antitakeover" consists of two main components: "anti-" and "takeover".
1. "Anti-" is a prefix derived from the Greek word "antí", meaning "opposite" or "against". It is commonly used in English to indicate opposition or resistance to something.
2. "Takeover" refers to the act of gaining control over a company or organization by acquiring its shares or assets. It typically involves one company acquiring another through various means, such as purchasing shares or implementing a hostile takeover.
Combining these components, "antitakeover" refers to actions or measures taken to oppose or prevent a takeover attempt.
It is important to note that while the word "antitakeover" is formed following the typical rules of English combining forms, it is not a widely recognized term in everyday language.
