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 ?
PHOTO : Another "Skeeter Skelton Style" handgun grip, but in rosewood, from Bear Hug grips.
The effort coincides with the introduction of Luvs diapers with new Bear Hug Stretch -- a premium diaper feature, at no extra cost.
I pushed him back to row six while he still had me in this bear hug and kept up his frenzy of stabbing the back of my head,' said Mr Kahn.
In accounts to police, customer Jacqueline Riley described Mr Cutts "jumping" or "lurching" over the edge while Kohi had him in a bear hug.
For me, seeing Tim Cahill and Simon Davies wrap each other in a big bear hug summed the day up.
Nothing says "love" like a Papa Bear Hug *FYI - REAL BEARS DON'T HUG Your Coverage is invited.
The Irish hunk slapped an affectionate smacker on his sister, Catherine, and gave her a bear hug at a special screening in New York of his new movie, Phone Booth.
The boy told investigators he put the girl in a bear hug, lifted her up and dropped her to the ground.
A limited number of campuses have extended a cautious hand; almost none a bear hug.
Zara Phillips' fianc, Mike, 32, had earlier wrapped Harry in a bear hug and dumped him on the grass at a polo match in the Cotswolds.
Russian president Boris Yeltsin gave Tony Blair a big welcome to the Kremlin yesterday with a rib-threatening bear hug.
IN THE SWIM Willy splashes with a ball in the water CHEW BEAUTY The polar bear eats a plastic toy SNOUT TO LUNCH Willy gets a plastic bin caught on his nose BEAR HUG The 8ft bear kills a marrow HAT'S GREAT Playful polar bear Willy makes a swim cap from one of his toys