5 Things to Consider in a Stock Takeover

stock takeoverShareholders in Allergan Inc. and Hillshire Brands Co. have faced a big dilemma in the past month: Each company is the subject of hostile takeover bids.

In the case of Hillshire, the first hostile bid by Pilgrim’s Pride Corp. at US$45 per share set off a bidding war, with Tyson Foods Inc. following up with a US$50 per share offer, which Pilgrim’s topped with a revised offer of US$55. Hillshire is trading near US$60, as investors bet on a continuation of the takeover battle.

In the case of Allergan, Valeant Pharmaceuticals International Inc. has already changed its bid twice (increasing the cash portion of the offer) to try to get the company into the fold.  Read More…

This article has 7 Comments

  1. Kerry

    To be fortunate enough to have my portfolio include a stock that is about to be bought out by another larger conglomerate would be a dream come true. Sadly, the only thing i've ever seen is when a stock was going to be delisted — GM, for me 🙁

  2. Edgar

    Are there any recent bids in the tech sector that i can go watch and read about?

  3. Toms K.

    LOL! I never knew that such a practice really existed because the only time i've heard about hostile bidding was in Pretty Woman (the movie), and WallStreet with Michael Douglas. Just thought it was fiction.

  4. Braydon Hussong

    I never understood why the stock price spikes during a takeover. The article gives hints as to why but i am still hazy on it. Anyone can clarify?

  5. Christia A

    I have been fascinated by these kinds of events for a long time and its much interesting to see how the Canadian regulatory body differes from U.S. counterparts.

    If anyone wants a summary on the differences just ask.

  6. Paxton P.

    Research the management team and future considerations the takeover company has in the works. In cases the fit might not be right, as was many things AOL did in the past and didn't work out for the other company. With that in mind you will know to adjust your current holdings.

  7. Nolan P.

    The smartest thing in the piece is the need to rebalance your portfolio after the takeover bid is in place. Way too many investors don't realize things will be widely shifted.

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