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In international practice, it is customary to divide methods of protection against hostile takeovers into two main categories:
Many business owners mistakenly believe that they are safe, while competitors have long been working to seize control of their enterprises. Human nature generally has the vice to take and appropriate for itself everything that lies badly and business that is in no way protected from unfriendly absorption has always been, is and will be a tasty booty. What can I say, because there are entire companies specializing exclusively in such seizures of foreign enterprises.
That is why it is so important to apply a number of certain preventive measures to protect your "overworked" business. These measures include the following:
The category Post-offer defense includes those measures that are taken after the aggressor company has actively shown its intentions and set about capturing the target. In this case, there is no time left for much thought and the introduction of any strategic protective measures. It remains only to act, and act decisively and as quickly as possible.
What actions can take in this case? Here is a list of the main ones:
Start a counter-purchase of the company's target stock. Moreover, the purchase can be carried out both by the target company itself and by its friendly companies. This method can be very time-consuming and, moreover, requires significant capital investments, and therefore it is not always effective enough;
To carry out an additional issue of shares. An additional issue of shares can greatly complicate the task of the aggressor company in capturing a blocking or controlling stake and, as a result, can lead to the rejection of takeover;
Transform a joint stock company into a limited liability company. The measure is quite effective, but can be implemented only with the number of shareholders not exceeding fifty people. It should be borne in mind that if after this kind of reorganization one of the shareholders decides to leave the company, then he will have to pay his share;
To reduce the attractiveness of the target company in the eyes of the aggressor by concluding agreements for the lease of part of the assets The bottom line is that the lease agreement cannot be terminated unilaterally (without the tenant’s consent) and the ardor of the aggressor can be greatly reduced when he finds out that the tidbits that he wanted to get through absorption will not reach him for a very long time. It is advisable to conclude such lease agreements with friendly companies, friends, relatives, in a word, so that for the company they have a more likely conditional character and it could be terminated if necessary;
Re-registration of the target company in another region, for example, with tougher antitrust laws, can also greatly complicate the work of the invader. The increase in the complexity and cost of the capture process may lead to the fact that the aggressor considers the absorption impractical;
Arrange a merger with a friendly company. This kind of “horseback riding” will minimize the likelihood of an unfriendly takeover, but here it is necessary to take into account the advisability of such a merger (would it not be that the interests of the target company would be severely damaged);
Litigation, litigation and lengthy litigation allows you to tie the aggressor, which is called "hand and foot" preventing him from continuing to absorb, or greatly slowing down this process, thereby allowing you to win the time necessary for the introduction of other methods of protection.