Do you think hostile takeovers are an ethical Why or why not?

Answer: It can best be argued that hostile takeovers are ethical. Usually, only weak companies face hostile takeovers, and, typically, shareholders and customers of the company benefit from the new organization.

What are the ethical issues in hostile takeover?

In the case of hostile takeovers, the loss of control is the biggest threat to the promoters, and this makes them vulnerable which is masked in the form of ethics. Once a company is listed the promoters should always remain aware of this fact that the company can be taken over by any other entity.

Is Hostile Takeover good or bad?

Hostile Takeover These types of takeovers are usually bad news, affecting employee morale at the targeted firm, which can quickly turn to animosity against the acquiring firm. While there are examples of hostile takeovers working, they are generally tougher to pull off than a friendly merger.

What is a hostile takeover?

A hostile takeover occurs when an acquiring company attempts to take over a target company against the wishes of the target company’s management. An acquiring company can achieve a hostile takeover by going directly to the target company’s shareholders or fighting to replace its management.

How do you avoid hostile takeover?

A preemptive line of defense against a hostile corporate takeover would be to establish stock securities that have differential voting rights (DVRs). Stocks with this type of provision provide fewer voting rights to shareholders.

Why do a hostile takeover?

A hostile takeover can occur for a few reasons. The two companies might have failed to reach a merger agreement, or the target company decided to not go forward with the merger. Also, a group of investors might believe the management of the company is not fully maximizing shareholder value.

What is the difference between a hostile and friendly takeover?

The difference between a friendly and hostile takeover is solely in the manner in which the company is taken over. In a friendly takeover, the target company’s management and board of directors. However, in a hostile takeover, the management and board of directors of the targeted company oppose the intended takeover.

What are the risks of hostile takeovers?

Hostile takeovers can be a traumatic experience for the company that is being targeted. Furthermore, this can also be risky for the company who will takeover especially at the event that it fails to acquire the necessary and relevant information regarding the target company (Smith).

Does Kantian ethics support hostile takeovers?

In this sense, Kantian ethics would only support hostile takeovers if the intention of the acquiring firm is considered as upright. If the intention of the purchasing firm is similar with what the defenders of hostile takeovers are saying then it can be regarded as ethical.

What is hosthostile takeover?

Hostile takeover is defined as a “type of corporate takeover which is carried out against the wishes of the board of the target company” (Smith).

Why do companies choose to take over other companies?

Their decision to takeover in a company is driven by the belief that they could increase the company’s worth to reach the value of what they are offering. Shareholders usually have a hard time in replacing the current management through the traditional proxy contest, which is why they opted for hostile takeovers.