bear hug

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Bear hug

Often used in risk arbitrage. Hostile takeover attempt in which the acquirer offers an exceptionally large premium over the market value of the acquiree's shares so as to as to squeeze (hug) the target into acceptance.

Bear Hug

An offer by a company to buy another company for a price per share far above the share price's fair market value. A company offers a bear hug when it believes the target company's management may decline the offer. Because the management has a fiduciary responsibility to act in the best interest of shareholders, the bear hug is essentially an offer the management cannot refuse, at least not without exposing itself to a lawsuit. It is a form of a hostile takeover and may be used as a form of risk arbitrage.

bear hug

A buyout offer so favorable to stockholders of a company targeted for acquisition that there is little likelihood they will refuse the offer. Not only does a bear hug offer a price significantly above the market price of the target company's stock, but it is likely to offer cash payments as well. See also takeover.
Case Study Following rejection by the General Motors board of an EchoStar Communications takeover proposal for GM-controlled Hughes Electronics, owner of DirectTV, EchoStar soon made another surprise bid to acquire Hughes. At the time of the bid Hughes's equity was trading on the New York Stock Exchange as a tracking stock. The second bid, announced with a public letter addressed to the GM board, was a bear hug offer made directly to Hughes's stockholders. Believing that General Motors directors were likely to recommend a sale of Hughes to Rupert Murdoch's News Corp., EchoStar felt it could only be successful by offering a higher price to Hughes's shareholders. The higher price would appeal to Hughes's shareholders and make it more difficult for GM directors to recommend a sale at a lower price to another company. GM directors rejected the earlier EchoStar offer in part because they felt the combination of DirectTV and EchoStar would be unacceptable on an antitrust basis. Rupert Murdoch later pulled out of the bidding for Hughes.
References in periodicals archive ?
27, 2015 /PRNewswire/ -- Today, Bearhug Outerwear LLC announced the launch date of their new line of outerwear that offers instant relief from the cold.
I used my prized Model 19 with an action as slick as proverbial glass and the custom BearHug Grips' Skeeter Skelton stocks fitted my hand perfectly.
At the end of his remarks, Hertzberg put his legendary bearhug around many Democratic and Republican legislators - a gesture that has come to personify the 45-year-old lawyer and businessman who lives in Sherman Oaks.
Father and daughter embraced in a giant bearhug and another child from the family joined in to welcome Tommy home.
In the late 1980s my dear friend Deacon Deason of BearHug Grips received permission from Skeeter Skelton to produce his well-known double-action stocks.
Harlequins' Andre Vos keeps a tight grip on Jonny WIlkinson with a bearhug at Kingston Park yesterday
Then, last week, Putin got a bearhug from Chinese leader Jiang Zemin, who had come to the Russian capital to sign a 20-year friendship treaty between Moscow and Beijing.
And Forster was on the end of a bearhug from his boss at full-time.
At The Box the couple supped Belvedere vodka and partied with actresses Jaime Winstone and Tilda Swinton, while Gossip singer Beth Ditto got Jamie in a bearhug.
Jim Riggs did the engraving and my dear friend, now gone Home, Deacon Deason of BearHug made the ivory micarta Skeeter Skelton grips.
Of the 59 students on the Sloan 98 programme, five are now working together on synergistic projects: three founded CQout plc and another two founded Bearhug Ltd.
Do you think of the year of Dennis Johnson and the Seattle SuperSonics or the year of Magic Johnson and the bearhug he threw around a stunned Kareem Abdul-Jabbar on opening night?