Pac-Man defence

The target attempts to reverse the direction of the contest by making or preparing a counter-acquisition proposal. The idea differs from finding a friendly third-party buyer or issuing defensive securities. Its credibility depends on financing, relative size, regulatory feasibility, shareholder support and the ability to manage the resulting business. It can change negotiating incentives but may create substantial leverage, distraction and transaction costs. Evaluate the proposed acquisition on its own commercial merits and within applicable takeover rules rather than assume that aggression alone defeats the original bid.