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Pac-Man Defense

Definition - What does Pac-Man Defense mean?

The Pac-Man defense is a strategy used by a target company to prevent a hostile takeover by turning the tables and attempting to acquire the firm that initated the hostile takeover.

Divestopedia explains Pac-Man Defense

Essentially, the Pac-Man defense is used to make a takeover very difficult for the would-be acquiring firm. If the acquiring firm is forced to deal with both their attempt to take over another company and the threat of a potential takeover themselves, the deal often proves too much to handle. This strategy can also prove difficult for the target company, because attempting to acquire the hostile takeover firm can require great resources that may not be available to them.

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