The world of business and finance is full of terms having to do with hostile takeovers -- some of them quite odd. Here is a short glossary of some of them. Many of these are noded; follow the links for more information.
Some Basic Terms
Hostile Takeover: A takeover attempt that is strongly resisted by the target firm.
Raider / Acquirer : a firm that is trying to take over another.
Target Company / Target firm; the one who is being taken over.
Sleeping Beauty: a firm that is a good takeover target.
In play: a company that is rumoured to be vulnerable to takeover attempts.
Deal stock: stock of a company that is rumoured to be a takeover target.
Buyout: to gain controlling interest in a company.
White Knight: a 3rd party that will make a friendly takeover attempt to counter an unfriendly one.
White Squire: a 3rd party that buys a large amount of stock, but not controlling interest, in order to prevent a hostile takeover.
Black Knight: the acquirer.
Yellow Knight: when the acquirer backs off and suggests a merger with the target company.
Gray Knight: a unsolicited 3rd party that tries to take over.
: the difference between expected cost and actual cost of the takeover.
: The acquirer signs an agreement with a bank which prevents the bank from financing any other takeover attempts on the target firm.
: buying stock at such a high price that the shareholders support the takeover attempt, even if the company does not.
: a takeover attempt that costs so much that the acquirer has to sell some of its assets.
: the acquirer intentionally breaks up the acquired company and sells some pieces off.
: buying a large number of shares in the target company without warning.
: a large block of stock is held by a hostile company; target company is forced to pay a premium to buy this stock from them.
Lady Macbeth Strategy
: a 3rd party poses as a white knight and then turns traitor.
: acquiring another company using borrowed money.
Proxy contest / Proxy fight
: the acquirer tries to convince shareholders to use their proxy vote
s to elect a new management that is more friendly to the takeover.
Saturday Night Special
: a surprise takeover attempt; most often, by making a public tender offer
: acquiring a company and selling off the parts that don't interest you.
Flip-in pill: See Poison pill.
Flip-over pill: the company's management gives stockholders the option to buy the acquirer's stock at bargain prices if the takeover takes place.
Golden Parachute / Golden Umbrella: the target company offers large retirement bonuses for executives that kick in if and when a takeover attempt is successful.
Jonestown defence: any antitakeover tactic that is so extreme that it threatens the target company's ability to survive.
Killer bee: an investment banker who devises strategies to prevent hostile takeovers.
Leveraged recapitalization: the company borrows a large sum of money and pays it off in dividends (or a buyback program), both raising the value of their stock and putting themselves in debt.
Lobster Trap: Company passes a provision preventing anyone with more than 10% ownership to converting securities into voting stock.
Macaroni Defence: the company issues bonds that will pay out much more if the company is acquired before they mature.
Pac-Man: the target company turns around and tries to take over the acquirer.
People pill: the current management threatens to quit if taken over.
Poison pill: (may refer to any antitakeover measure, also has more specific sense;) company sells stocks at bargain prices to stockholders, to dilute stock. This is sometimes called a Flip-in pill. See Whitemail.
Sandbag: any stalling tactic on the part of the target firm.
Scorched-earth policy: disposal of assets that make the company attractive to the raider -- can be used as prevention or revenge.
Shark repellent: Any antitakeover tactic.
Suicide pill: a poison pill so strong that it will destroy the company if it is taken over.
Whitemail: the company issues more stock at a low price. Differs from Poison pill in that anyone can buy the stock, not just current stockholders.
Other Related Terms
Enterprise Value (EV): measure of a company's value. Calculated as market capitalization plus debt plus preferred shares, minus cash and cash equivalents.
Fairness opinion: the professional opinion of an investment banker on the fairness of a buyout offer.
Garbatrage: the rising of prices and volume of stock in a sector in which there has recently been a takeover.
Management Buyout: the managers or executives buy controlling interest in their own company, usually to take the company private.
Rumortrage: trading based on the threat of a takeover.
Takeunder: offering a target company a price for shares that is less than current market value.