A hostile acquisition, or hostile takeover, refers to the acquisition of a company other than through the purchase of the company directly. A hostile acquisition may be an important corporate strategy to achieve business goals and growth. For an acquiring company, a hostile takeover can be a challenging process. The boards of directors of many corporations commonly have mechanisms in place to attempt to prevent hostile takeovers and a targeted company may have a number of potential defenses available to it to attempt to deny a hostile acquisition.
Setting goals can be essential to effectively guiding a business and achieving growth. One survey revealed that a majority of small business owners surveyed do not set and track business goals and also report they have no achieved their visions for their businesses. It is important to set and distinguish short-term versus long-term goals. Long-term goals should be based on a three to five year plan.
Mergers and acquisitions can be a big step for any business. The national banking industry, for example, has seen a wave of mergers due to increased costs and competition. The consolidation activity throughout the banking industry has also had an impact on the banking industry in Louisiana. Nine banks in Louisiana have either agreed to or completed acquisitions over the past two years. The smaller banks in Louisiana that will be acquired will likely be purchased by institutions headquartered in Baton Rouge and other major Louisiana cities.
The concept of a reverse merger may arise in different contexts. By definition, a reverse merger is the acquisition of a company that is already public. This process helps a merging company avoid an initial public offering, or IPO, process. It also allows start-up companies, for instance, access to a public exchange which provides opportunities for fundraising and selling the company's stock. It can provide additional benefits as well such as stock option opportunities for employees; liquid shares to purchase other companies; and credibility to attract both customers and suppliers.
Business growth and opportunities can take many forms, including through acquisitions and mergers. An international insurance broker that has completed more than 300 acquisitions worldwide in the past 12 years has also purchased multiple well-established Baton Rouge insurance agencies. A local man who worked for the company's first Baton Rouge acquisition has now become the company's regional president. In a recent interview, the many said that not much in the way of day-to-day operations changed after the Arthur J. Gallagher & Co. purchased the company he worked for back in 1991.
Business litigation is a concern for any party entering a complex business transaction which is why understanding the details of the transaction can be important. An aviation company, Landmark Aviation, recently completed its acquisition of local Ross Aviation. Ross Aviation is the owner of the Louisiana Aircraft fixed base operation which is located at the Baton Rouge metro airport. Landmark is already a fixed base operator in two airports in two other Louisiana cities. Landmark s based in a nearby state and Louisiana Aircraft acquired was acquired by Ross in 2013. The acquisition price for Landmark in this transaction was $330 million.
A thorough understanding of a business opportunity can help better ensure its success. It was recently reported that a utility company a couple of hours north of Baton Rouge received a $5 billion, unsolicited, offer from an infrastructure investor. The reports caused the utility company's stock price to rise. Stock prices for the utility company have ranged from $43.69 to $56.37 over the past year but the company is looking for $61 to $62 a share and has hired a prominent investment bank as an advisor. The utility shopped itself around last year but failed to garner the price it was looking for in any acquisition.
A merger can be a serious consideration for any company which is why legal tools and resources are available to assist and guide merging parties through the process.
A newly formed strategic merger with a Baton Rouge outdoor-lifestyle company and an Illinois outdoor products company was recently announced. The merger is between Plano, a fishing accessories and outdoor sports storage system company, and Synergy Outdoors, based in Baton Rouge, which specializes in outdoor-related brands.
When a company seeks to expand its share of a market, they may consider the possibility of acquiring a competitor. While the complexities of an acquisition may expand when dealing with larger businesses, it is a strategy that even small to mid-sized businesses in Louisiana can utilize if properly managed. Yet, for all their complexities, acquisitions occur regularly in the business world and can help companies meet their business goals.