"Hostile" takeovers

[CG6468]

Abbott Labs is splitting into two branches; pharmaceuticals and medical devices. Our daughter is an assistant director  for the pharmaceutical section and will supposedly be unaffected by this.

Abbott's CEO stated that neither section is for sale under any circumstances.

But..........during previous similar occurrences by other companies, and even when there was no splitting of companies, they were absorbed by another owner through a hostile takeover.

Will someone explain to me in terms that I can understand what a hostile takeover is?

[Rugnuts]

a company is bought (or brought under new management) without the prior management's/owner's agreeing.


info from here http://www.investopedia.com/

definition:

"The acquisition of one company (called the target company) by another (called the acquirer) that is accomplished not by coming to an agreement with the target company's management, but by going directly to the company’s shareholders or fighting to replace management in order to get the acquisition approved. A hostile takeover can be accomplished through either a tender offer or a proxy fight."

explanation:

"The key characteristic of a hostile takeover is that the target company's management does not want the deal to go through. Sometimes a company's management will defend against unwanted hostile takeovers by using several controversial strategies including the poison pill, crown-jewel defense, golden parachute, pac-man defense, and others."

[TVDOC]

The best defense is for a company to hold onto a minimum of 51% of their outstanding shares......it limits capital, but it keeps you whole.

  This is the reason that many corporations in this economic climate, where they are flush with cash are buying up  their own shares for future planning.

doc

[CG6468]

Thanks!

[caballo loco]

Abbott Labs is splitting into two branches; pharmaceuticals and medical devices. Our daughter is an assistant director  for the pharmaceutical section and will supposedly be unaffected by this.

Abbott's CEO stated that neither section is for sale under any circumstances.

But..........during previous similar occurrences by other companies, and even when there was no splitting of companies, they were absorbed by another owner through a hostile takeover.

Will someone explain to me in terms that I can understand what a hostile takeover is?

They did this before when hospira formed.