Golden Parachute. Where executives are entitled to extraordinary severance packages in the event of early termination of their employment contract
, this can sometimes dissuade a purchaser from committing a large investment
, knowing that a substantial portion will be leaving with the current management.
Supermajority. If the corporation
articles require a 2/3rds or greater shareholder
vote to approve major corporation decisions, then this can prevent some purchasers from committing sufficient resources to the purchase of the takeover target.
Staggering board of director terms. If replacing the board of directors
is structured so that it may require several years to accomplish, a prospective buyer may back away, knowing that the buyer cannot gain complete control for an extended period of time.
White Knight. A takeover target can sometimes find another investor willing to pay more to maintain the current ownership, and thus create a bidding war in the market, so as to make the takeover price undesirable.
PacMan. The takeover target can try to acquire the business
attempting to purchase the takeover target.
Divestiture. The takeover target can sell the business' most important and valuable assets to a private shell company with the same management, held in different form. This technique devalues the takeover target.