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Pac-Man defense
[ pak-man ]
noun
- a defensive tactic against a hostile takeover in which the targeted company makes its own bid to take over the hostile firm.
Word History and Origins
Origin of Pac-Man defense1
Example Sentences
In 1982, Mr. Agee pursued a hostile acquisition of aerospace and building-materials company Martin Marietta that led to an early example of the so-called Pac-Man defense, in which the target turns around and tries to buy the acquirer.
For Tribune Publishing to enlist the so-called Pac-Man defense and gobble up its larger rival instead would be considerably more expensive.
The deal was a rare recent example of the notorious corporate finance maneuver called the “Pac-Man” defense, in which a company that is a target of a takeover fends off an unwanted bid by making a bid for its suitor.
Yet again, a business was acting for reasons other than building a better business, instead preferring to play a kind of “Pac-Man” defense.
In business and legal circles, a “Pac-Man” defense is now known as a strategy in which companies targeted for hostile takeovers try to gobble up their opponents before they are eaten themselves.
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