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Chapter 12

Defences against takeover

4.1 Introduction to defences

Any listed company needs to be aware that a bid might be received at
any time.

The directors of a company subject to a hostile takeover bid should act
in the best interests of their shareholders. However, in practice they will
also consider the views of other stakeholders (such as employees, and
themselves).

4.2 Pre-bid defences

 Communicate effectively with shareholders

 Revalue non-current assets

 Poison pill

 Change the Articles of Association to require ‘super majority’ approval for a
takeover

4.3 Post-bid defences

 Appeal to their own shareholders

 Attack the bidder

 White Knight

 Counterbid (or ‘Pacman’ defence)

 Refer the bid to the Competition authorities

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