Responding to a Takeover Bid

'Preparation is the best defence'. If there is one context in which this expression rings truer than most, it is in 'Responding to a Takeover Bid'.

One of the worst scenarios that a company could find itself is to be unprepared for a takeover bid. Without a readily available and robust system for responding to unsolicited takeover bids – in particular, a hostile bid – statements could be made by officers or employees of the target company that could:

• prejudice the company's ultimate response strategy;
• limit the company's future actions;
• mislead the market;
• provoke unwanted selling by long-term or cornerstone investors; and
• expose its directors to personal liabilities.