TLDR:
A hostile takeover is an acquisition attempt where the acquiring company pursues the target company’s shareholders directly without the support or approval of the target’s board of directors.
Hostile Takeover Defense Strategies
Companies deploy multiple defensive strategies to prevent hostile takeovers. The ‘staggered board’ divides directors into classes with multi-year terms, preventing an acquirer from replacing all directors in a single election. ‘Dual-class shares’ give founders supervoting rights that preserve control regardless of economic ownership (used by Google, Facebook, and Snap in their IPOs). ‘Golden shares’ grant the holder (often government entities in strategic industries) veto rights over major ownership changes. ‘Crown jewel defenses’ involve selling key assets to make the company less attractive to an acquirer.