Hostile Takeover Defenses: An Analysis

Mehek Shah, Government Law College, Mumbai

Siddhant Jain, NMIMS’ Kirit P. Mehta School of Law, Mumbai

ABSTRACT:

The phenomenon of hostile takeovers presents a significant challenge to corporations and their stakeholders, necessitating the implementation of effective defensive strategies. This abstract provides an overview of the various defenses available to target companies, aiming to protect their autonomy and safeguard the interests of shareholders, employees, and other stakeholders.

This research examines a range of defensive measures deployed by companies to deter, delay, or negotiate in the face of a hostile takeover attempt. The strategies explored include structural defenses, such as poison pills, staggered boards, and dual-class share structures, as well as contractual defenses like golden parachutes. This paper alsp discusses the emergence of Hostile Takeovers in India and Regulatory framework of these takeovers. Lastly, some loopholes identified by the researcher are also listed and concluded by giving some suggestions.

The case study done here enlightens us to find the need for a comprehensive and tailored approach to defense strategies, considering the unique characteristics of each company and its industry. It becomes apparent that no single defense mechanism can provide a foolproof solution; rather, a combination of strategies, adapted to the specific circumstances, can enhance a company's ability to protect itself against hostile takeovers while upholding the best interests of all stakeholders.

Ultimately, this abstract contributes to the understanding of defenses for hostile takeovers, offering insights that can inform corporate decision-making, regulatory frameworks, and further research on the subject.

Keywords: Hostile Takeovers, Defense Strategies, Target company, SEBI Guidelines, Corporations.