A Hostile Bid refers to an attempt by one company (the acquirer) to take over another company (the target) against the wishes of the targetís management and board of directors. Unlike a friendly acquisition, where both parties agree on terms, a hostile bid bypasses the target companyís leadership and directly appeals to its shareholders to gain control.

In a hostile takeover attempt, the acquiring company typically uses strategies such as a tender offer or a proxy fight. In a tender offer, the acquirer proposes to buy shares directly from shareholders at a premium over the current market price to encourage them to sell. In a proxy fight, the acquirer seeks to replace the companyís existing board of directors with individuals who will approve the takeover.

Hostile bids are often motivated by the acquirerís belief that the target company is undervalued or poorly managed, offering an opportunity to unlock greater value. However, such takeovers can lead to legal battles, regulatory scrutiny, and internal resistance within the target firm. To defend against hostile bids, companies often adopt tactics like a poison pill (issuing new shares to dilute the acquirerís stake), white knight defense (seeking a more favorable buyer), or golden parachutes (offering large benefits to executives in case of takeover).

While hostile bids can sometimes enhance shareholder value if the acquiring firm improves efficiency and profitability, they can also disrupt business operations and damage employee morale. In regulated markets like India, such actions are monitored closely by authorities such as SEBI to ensure fair disclosure and protect investor interests.

Overall, a hostile bid represents a high-stakes corporate strategy where financial, legal, and ethical considerations play a critical role in determining the outcome of the acquisition attempt.