Nowadays, mergers and acquisitions can be labelled as a worldwide phenomenon and the value of announced transactions highlights their importance in today's world of business. Most mergers and acquisitions are friendly, which means that the directors of the acquirer and the target negotiate and finalize a mutually acceptable deal. However, the high level of hostile activity during the 1980s had also encouraged the development of a wide range of anti-takeover defences. Their application by offeree companies remains one of the key issues in the context of takeover bids.
The thesis first provides the background information on different types of mergers and acquisitions and defines the concept of hostile takeovers. This is followed by the overview of the relevant provisions of the Directive 2004/25/EC on takeover bids and the Slovenian Takeovers Act including the description of the board neutrality rule, the breakthrough rule and the reciprocity rule.
Further, as the main part of the thesis, the most common anti-takeover defence strategies are presented. These include white knights, white squires, poison puts, poison pills, staggered boards, greenmail, scorched earth policies and others. Such tactics may prevent a change of control, make takeovers more difficult or costly, or allow offeree companies to negotiate higher prices. Takeover defences can be classified as pre-bid and post-bid defences. Pre-bid defences shall constitute barriers to the acquisition of shares in the company or barriers to the exercise of control at the general meeting. Post-bid defences, on the other hand, are put in place once the company has become subject to a takeover bid.
In the end, the findings based on several global empirical research projects in the field of hostile takeovers are summarized. The summary outlines which defence measures had been most frequently applied and further provides information on their effects on the hostile bid.
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