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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
"We know that Luvs with Bear Hug Stretch will help families do just that," he says.
Using a point of purchase rack, says Bear Hug's Deacon Deason, is probably the best eye-catcher going.
He agreed with Judge O'Connor that the alleged clinch could be described as a bear hug. Asked if this was an "inordinately strong squeeze", the garda said it was not.
Bear hug: Walker and Arktos get to know each other at their enclosure at Highland Wildlife Park in Scotland.
BEAR HUG: Arktos and Walker meet for the first time in their enclosure yesterday
Pop The 2 Bears Be Strong The 2 Bears are Hot Chip's Joe Goddard and Raphael 'Raf Daddy' Rundell, who started to work together in 2009 and have released three EPs.The influence of 1990s dance music is evident in their first full-length album, although there is also an undeniable pop-type edge, especially on the euphoric Ghosts & Zombies with its 'higher and higher'hook.Warm And Easy nods to the drug culture of the dance scene, while Bear Hug is playful and cheeky.Time In Mind is singalong country and the gospel tinge of closing track Church shows off this debut's diversity of styles that, in the embrace of The 2 Bears, works beautifully.
In one a man grabbed a woman in a bear hug as she was walking.
The author of 'My Booky Wook 2' embraced another reader into a bear hug while signing a copy of his second autobiography at Barnes and Noble in New York.
And there wasn't a cheek left unbristled by the gaffer's beard as Lionel Messi was lifted up in a bear hug, Carlos Tevez pecked and Higuain's face stroked.
Written and illustrated by Nicholas Oldland, "Big Bear Hug" is a joyous romp of a story about a bear who loves everything and everyone so much that he gives them all big bear hugs.
One held him in a bear hug and, when the victim called for help, he placed his hands over his throat and mouth very tightly.