The Bear Hug Strategy: A Comprehensive Guide for C-Suite
At its core, a bear hug is a proposition that a target company’s board cannot easily refuse. The offering company (acquirer) proposes a purchase price well above the target’s current market valuation, making it difficult for the target’s shareholders to decline the deal.
Unlike traditional mergers and acquisitions (M&A), the bear hug stands out for its aggressiveness combined with a veneer of goodwill. It offers substantial financial gains to shareholders, thereby placing immense pressure on the target’s board to accept the proposal.