The Theory Of Possibility To Operate Hostile Takeover

Hostile takeover, compared to friendly takeover, gets its name for the characteristic of hostility toward target company by bidder. As the stocks of modern public company may be transferred at liberty and the stocks are so dispersed that the ownership and control over company are separated , it provides opportunity for hostile takeover to occur.Hostile takeover helps for enterprise to expand its scale and make more profits. Moreover hostile takeover is helpful for economic development and improvement of social welfare with the function of optimizing the utility of recourses. At the same time, hostile takeover contributes to the problem of corporate governance. By way of expelling existing managers, hostile takeover makes managers of target company under pressure of being replaced and thus has the function of supervising and inspiring companies with poor management.Hostile takeover has easy form to operate, and with the development of stock market of inside and outside, the laws of hostile takeover will get , and provide well circumstance to hostile takeover.Hostile takeover takes place few in our country, because of stock-right concentration. State-stock occupies the main status and does not circulate. But with the stock-entire-circulation, hostile takeover faces the wide field to develop .