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"and fend off takeover offers from larger rivals" Why does a private company need to be concerned about takeovers?

• simonswords82 11y ago
  Not all takeovers are positive unfortunately. One incredibly basic scenario I can imagine playing out... I own 1/3 of a company, with two other founders who own 1/3 each. We're approached by a company that wants to buy us, and they offer a deal that my co-founders jump at but I'm not so sure. I now need to "fend off" the takeover by convincing my co-founders not to see the deal through. This is especially troublesome given they have a majority between them. If there are more than three shareholders or more complex company structures (such as a company that previously raised a round of investment and has a group of investors looking to get out) then more possibilities come in to play. Let's then go on to assume that the (hostile) takeover isn't successful. The buyer could seek opportunities in my marketplace to make my business less valuable. They might purchase a competitor who was previously smaller than us but is then provided the capacity and financial resource for growth that we do not have.
  • brainflake 11y ago
    Just because one person doesn't want it doesn't make it a hostile takeover. If the board votes for it and a majority of shareholders approve (as would seem to be the case in your example) then it's definitely not hostile.
    • simonswords82 11y ago
      Sure you can take that view, you're absolutely right that the exact definition of a hostile takeover is one that is carried out against the wishes of the board. Having said that...if I'm the minority and I don't agree with the takeover then as far as I'm concerned, it's hostile! :)