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Business ethics presentation
- 1. BUSINESS ETHICS Acquisition & Takeover PRESENTED BY: SHEHZADA BABER MOHAMMAD SADIQ ZAHIR SHAH REHAN ISHAQ
- 2. ACQUISITION • When one company takes over another and clearly established itself as the new owner, the purchase is called an acquisition. • Acquisition is generally considered negative in nature.
- 3. HOSTILE TAKEOVER • A corporate action where an acquiring company makes a bid for an acquire. If the target company is publicly traded, the acquiring company will make an offer for the outstanding shares.
- 5. TAKEOVER: WHY & WHY NOT WHY IS IMPORTANT i. Increased market share. ii. Increased speed to market iii. Increased diversification iv. Avoid excessive competition. WHY IS NOT IMPORTANT i. Inadequate valuation of target. ii. Inability to achieve synergy. iii. Finance by taking huge debt.
- 6. TACTICS AGAINST HOSTILE TAKEOVER • Poison Pills used by corporations to discourage hostile takeover. With a poison pill. • Super-Majority Amendments is a defense that requires 70 or 80 percent of shareholders to approve of any acquisition. • Golden Parachute as a defense strategy is a special and lucrative package, which aims to stagger and make hostile takeovers more expensive.
- 7. OCCURENCE • Corporate takeover is a complex business transaction pertaining to one company purchasing another company. Corporate takeovers typically take place for many logical reasons, including anticipated synergies between the acquiring company and target company, potential for significant revenue enhancements, likely reduced operating costs and beneficial tax considerations.
- 8. CONCLUSION • Corporations have many hostile takeover defense mechanisms at their disposal. Given the level of hostile corporate takeovers that have taken place in the certain states during the first part of this century, it may be prudent for management to put in place preemptive corporate takeover mechanisms, even if their company is not currently being considered for acquisition.