Hostile M&A

Unfriendly Take-Over Attempts Are Increasingly Common

According to FactSet, Nearly 10% of M&A transactions so far in 2017 were hostile or unsolicited in nature. In a market where M&A has ballooned to over $3.9 trillion in deals, this represents a significant portion of deal count and even more so of deal value. As acquirers’ appetites and budgets continue to grow, large-cap companies are no longer protected by scale and small- to mid-cap companies remain attractive for growth.

FTI Consulting Improves Your Defense


  • FTI is the top worldwide financial advisory firm, offering operational enhancement, SG&A reductions and CapEx analysis.
  • In a non-cash hostile M&A bid, it is the board's fiduciary duty to fully evaluate all equity under consideration. FTI has the forensic accounting and investigative skills to undergo a comprehensive analysis of the acquirer's stock and assess the motives behind the deal.
  • FTI focuses on enhancing shareholder value at every stage in a hostile takeover attempt.
Preparedness

Working Group – structures and processes for the team leading the defensive response

Information Gathering, Analysis, and Vulnerability Assessment

Stakeholder & Influencer Mapping Digital Infrastructure – from listening and alerting to proactive content outreach

Media Preparation

Event

Scenario Analysis and Response Strategy Formation

Narrative Building

Execution

Surfacing narrative through direct investor outreach, engagement with proxy advisory firms, media, and social media content

Material Creation and Engagement Strategy

Stakeholder and Activist Engagement

Government Relations and Public Affairs

Employee Engagement

When You Need Hostile M&A Defense, FTI Can Help You


  • Keep Information at Your Fingertips
    • Utilizing FTI Consulting’s proprietary software, Ringtail®, FTI professionals will employ highly sophisticated search technology and algorithms to document and search through, if needed, all of the client’s SEC Filings, comment letters, publicly available information and corporate governance tools such as bylaws, company policies, code of conducts, and board structures to develop an assessment of the client’s vulnerability as an activist target
    • Perform due diligence to gather business intelligence on boards of directors, key senior officers (chief executive officer, chief financial officers, and general counsel), competitors and shareholders to identify any potential risk areas for the target and the bidder
  • Focus on Proper Messaging
    • Develop key message platforms to ensure consistent, coordinated communications to shareholders, employees, government and regulatory bodies and media
    • Leverage the media, when appropriate, to quickly disseminate the desired message engaging both traditional media and social media sources
    • Build a digital infrastructure to fight on your behalf
  • Understand the Regulatory Environment
    • Ensure that representatives are following all legal requirements during and after the bid period
    • Prevent leaks to the media in order to maintain the viability of your position; meanwhile, manage internal communications to ensure consistent messaging to employees
    • Review current charter and bylaw provisions, shareholder rights plans, current and future loan agreements and indentures, control triggers in material agreements and director nomination processes
      • Strengthen these policies and remediate any areas of improvement
  • Educate Shareholders
    • Communicate frequently and with consistency the potential value destruction the hostile takeover would result in
    • Prioritize outreach to shareholders via direct meetings and roadshows
    • Manage messaging to sell-side analysts to incite doubt over rationale of the deal
    • Guarantee the validity of each quarterly earnings statement
  • Undergo a Strategic Assessment
    • Consider bolt-on acquisitions
    • Analyze performance of total shareholder returns compared to peers

Notable Hostile M&A Clients

  • Shire
    Shire plc
    Represented acquirer in an unsolicited offer / preparation for meeting with large activist
  • Monsanto
    Monsanto Company
    Represented acquirer in unsolicited offer
  • Perrigo
    Read More
    Perrigo
    Defended company against hostile takeover attempt
  • Allergan
    Read More
    Allergan
    Defended against an activist attempting to a push a company into a sale and a hostile acquirer