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An aggressive takeover technique in that the proposed offer of the acquiring company is so large that management of the target company cannot refuse, out of fear of lawsuits or shareholder revolt.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
An offer by an acquiring company to buy a target company for far more than the target's market value. Often, the board of directors may be inclined to refuse a godfather offer (primarily because it could cause them to lose their jobs), but the price is so high that actually refusing would expose the board to lawsuits by shareholders. A godfather offer is usually made when the target company's stock has been stable or declining for an extended period. The term gets its name from the film The Godfather, because it is an offer the board cannot refuse.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved