In this environment of declining stock prices, it is more
critical than ever for companies to be prepared for unsolicited
takeover bids. Selling a company when its stock price is at
historically low levels may not necessarily maximize shareholder
value, even if a potential acquirer offers a premium on the current
stock price. Preparation for takeover attempts requires careful
planning and a proactive, flexible approach. To minimize the risk
of becoming the target of an unsolicited bid, a company should
consider taking the following preventive measures:
Prepare the board of directors. Companies
should prepare their boards to deal with unsolicited bids by
maintaining a unified board consensus on key strategic issues.
Companies should review basic strategy with their boards in light
of possible arguments for sales of divisions or business units,
spin-offs, share buybacks, special dividends, or other structural
changes. Companies also should schedule periodic
