GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Takeover


Synonyms:aquisition, merger, purchase
Filed Under: financial-banking, investments, legal-contracts
Tags: banking, contract, investment, legal
 

Definition of takeover

takeover
1. The acquisition of a company by another company. The company being acquired is typically called the "target" and the one purchasing is typically called the "acquirer" or "bidder." There are four common types of takeovers: "friendly takeovers," "hostile takeovers", "reverse takeovers," and "backflip takeovers." A friendly takeover is a purchase where both parties' management approve of the sale. A hostile takeover is a purchase where the target company's management is against the sale, but the bidder can go around them and purchase the company directly from the shareholders. A reverse takeover is when a private company purchases a publically traded company, often to bypass the IPO process. A backflip takeover is when the purchasing company becomes a subsidiary of the purchased company.

Related Terms and Acronyms:

  • annex   To add one thing onto another.
  • backflip takeover   A form of takeover where the purchasing company becomes a subsidiary of the purchased company.
  • friendly takeover   When a company purchases another and both parties' management approve.
  • hostile takeover   When a company purchases another but the target company's management does not approve.
  • reverse takeover   The purchase of a public company by a private company, often to avoid the IPO process.

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