Bear Hug
An offer made by one company to buy the shares of another for a much higher per-share price than what that company is worth. A bear hug offer is usually made when there is doubt that the target company's management will be willing to sell. By offering a price far in excess of the target company's current value, the offering party can usually obtain an agreement. The target company's management is essentially forced to accept such a generous offer because it is legally obligated to look out for the best interests of its shareholders. Investopedia Says:
The name "bear hug" reflects the persuasiveness of the offering company's overly generous offer to the target company. By offering such a large premium, the acquiring company essentially uses its clout to squeeze an agreement out of the target company's management. Related Terms:
Board Of Directors - B Of D
Hostile Takeover
Shareholder
Sleeping Beauty
Sweetheart Deal
Takeover
Target Firm
Tender Offer |