Possible defence tactics and themes
Work up defence tactics and themes with the company’s advisers. These will require defence team/board sign-off and speed will be critical. Some possible tactics and themes are set out below:
- make the approach public – this is likely to result in an immediate share price rise, but would put your company "in play’"
- value defence – ie demonstrate how the approach merely offers some cash today versus your company’s ability to deliver more tomorrow
- split-up option(s). In essence, this is a variation of a value defence. You will need to consider:
- the potential timetables involved in implementing any split-up options
- exactly how any cash can be returned to shareholders following any split-up
- are there any "white knights" in the market you can approach?
- are there any obvious regulatory defences available, including:
- potential anti-trust issues raised by the bidder’s proposed offer
- potential political or regulatory dimensions that can be used to the company’s advantage
- Bidder attack:
- with your advisers, consider any possible conflict of interest for the bidder’s investment bank
- in what way might the bidder’s financial position and/or credibility of its value assumptions be attacked?
- what negative PR angles can be explored and exploited?