An attempt to acquire a large portion of a company's stock to gain control by offering stockholders a premium over the market value for their shares.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
A tactic in hostile takeovers in which the acquiring company offers to buy shares of the target company at a substantial premium to their market value. A premium raid is intended to force control of the company away from its board of directors, either by making the acquiring company the majority shareholder or by giving it effective veto power over board elections. That said, a premium raid can be very expensive.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved