Proxy Fight

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Related to Proxy Fights: Proxy contest

Proxy fight

Often used in risk arbitrage. Technique used by an acquiring company to attempt to gain control of a takeover target. The acquirer tries to persuade the shareholders of the target company that the present management of the firm should be ousted n favor of a slate of directors favorable to the acquirer, thus enabling the acquiring company to gain control of the company without paying a premium price.

Proxy Fight

Competition of outside group with management for stockholders' proxies in order to accumulate votes to elect a new board of directors.

Proxy Fight

A situation in which two investors (usually two companies) compete with one another in the attempt to gain the proxy votes of shareholders in a third company. The two investors engage in the proxy fight because both wish to have enough proxy to elect a new board of directors that will effectively do whatever the investor wants. The winner of a proxy fight, if any, is able to control the third company through the board of directors and does not need to directly acquire it, though many often do anyway.

proxy fight

A contest among two or more opposing forces to solicit stockholders' proxies and, in effect, to gain control of the firm through the election of directors. It is usually quite difficult to wrest control from the existing management through a proxy fight, but the tactic has been used, for example, by some suitors in takeover attempts.
References in periodicals archive ?
208) Proxy fights cost money, and hedge fund activists can and do pay the price.
Expenses incurred by a corporation in a proxy fight are also generally deductible.
Within the framework of this model, however, leverage increases are not identical for tender offers and proxy fights.
If this is the case, executives who want to avoid having proxy fights in their firms must take steps now which will reduce their occurrence.
The IRS issued revenue ruling 67-1 to announce it would follow the decision in Locke Manufacturing on deductibility of corporate proxy fight expenditures.
Such efforts by a minority shareholder to obtain control of a corporation through a proxy fight are analytically indistinguishable from a hostile tender offer: in both instances a shareholder or potential shareholder inimicable to management seeks to acquire voting control of the corporation in order to direct its affairs.
Notably, the firm has worked on four proxy fights this spring defending clients against hedge fund attacks and has counseled many other clients on accumulations of shares by hedge funds.
In response to proxy fights, hostile takeover offers, and quiet negotiations, many firms have cut costs, tightened their focus on core units, and dumped executive perks.
Historically, the onus has fallen on large shareholders to engage in acts of "shareholder activism" such as takeovers, proxy fights, and shareholder proposals when the interests of management and shareholders diverge.
Takeovers & Freezeouts addresses important developments concerning standards of conduct for board members, reducing vulnerability to hostile takeovers, specific responses to overtures and takeover bids, proxy fights and institutional activism, pre-merger notification under Hart-Scott Rodino, state regulation of tender offers, tax, accounting and ERISA considerations, antitrust considerations, and takeovers and mergers in the banking industry.
The Altman Group handles annual and special meeting solicitations for corporations and mutual funds, provides broker search and distribution, corporate governance consulting, vote projections, shareholder identification services, as well as a full slate of services for proxy fights, mergers and acquisitions and tender and exchange offers.