You hear a lot about hostile takeover bids bids. So you might wonder, what are the odds of success for the company that launches the unsolicited takeover battle?
According to a study by law firm Fasken Martineau DuMoulin LLP, first-mover bidders who initiated 143 hostile takeover battles for Canadian-listed public companies during the past 10 years succeeded 55% of the time. As for targets, when white-knight bidders enter the mix, 70% of target companies wound up acquired. When an unsolicited bid attracts a competing offer, the target was acquired 86% of the time — but the original bidder succeeded only 33% of the time.
Bidders who want to win had best consider cash and premiums. A premium of 30% of more carried the day 75% of the time.
Now, where does PDAC enter the mix? About 44% of the targets examined in the Fasken study were mining companies.