Hostile takeover

Question 1

How do hostile takeovers take place?
How does the managment react?

Answer 1

• by first acquiring shares, for cash, in the capital market
• by making a formal offer to the remaining shareholders at a premium
• than target´s shareholders can accept it or wait for a sweetened offer
  Management: the bidder may have sought the target management’s support in advance, or it releases information that the business is still great –> goal: increase share price