BATNA, coined by negotiation theorists Roger Fisher and William Ury in their book Getting to Yes, refers to the most favourable outcome you can achieve if negotiations fail. It is not just a fallback plan; it serves as the benchmark against which any proposed agreement is measured.
An arm’s length transaction represents a business deal in which buyers and sellers operate independently and have no pre-existing relationship, ensuring that neither party exerts undue influence over the other. This concept is widely respected across industries as it aims to create a level playing field, facilitating fair market value and transparency. For C-suite executives, understanding arm’s length transactions is fundamental, as these transactions protect the business’s integrity and foster trust among stakeholders.
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.