Acquisition defence
An acquisition defence is a measure used to deter, resist or respond to a takeover proposal. Examples can include seeking a competing bidder or, where permitted, changing a transaction or asset arrangement. The effect must be assessed from shareholders' and other relevant stakeholders' perspectives: a measure that protects management can reduce shareholder value. Rules governing board action, disclosures, approval and fiduciary duties differ by jurisdiction, so legal permissions must be checked rather than inferred from a generic textbook list.
Worked example
A target board considers seeking an alternative bidder offering a higher price. It assesses whether the proposal is credible, the applicable disclosure rules and whether shareholders benefit after conditions and costs.
Common mistake
Assuming every defence is lawful in every market or that protecting the current board is automatically the same as protecting shareholder value.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AFM | Direct | September 2026–June 2027 |