What characterizes a hostile takeover?

A hostile takeover is characterized by an acquisition attempt where the acquiring company seeks to gain control of a target company without the consent or approval of the target's management. This often involves acquiring enough shares in the target company to obtain a controlling interest, despite the target's management resisting the takeover. In essence, it can be seen as an attempt to bypass the existing management and appeal directly to the shareholders, who may favor the proposed deal for various reasons, such as the potential for financial gain.

This scenario is distinct from other forms of acquisitions, such as friendly acquisitions or buyouts, where both parties negotiate and come to an agreement on the transaction. Additionally, the mention of regulatory approval in the context of mergers does not inherently relate to the nature of the takeover being hostile or friendly; it is a common requirement for many transactions, regardless of the dynamics between the parties involved. Thus, the defining aspect of a hostile takeover is the pursuit of acquisition against the wishes of the target's management.