DEFINITION of ‘Killer Bees’
An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an attempted hostile takeover from occurring. Companies use a variety of anti-takeover measures, sometimes referred to as shark repellents, to discourage unfriendly takeover attempts from happening. Once an unfriendly takeover attempt has been initiated, the company can use other anti-takeover measures to deter or prevent the takeover.
The use of killer bees is one anti-takeover measure that a company can employ. Other tactics include the white knight – a more friendly acquiring company willing to enter the bidding war; the standstill agreement – a negotiated agreement that limits the takeover company’s holding in the target company; the Pacman defense – the target company makes a takeover bid for the stock of the bidding company; and litigation – to delay a takeover attempt.
BREAKING DOWN ‘Killer Bees’
The merger and acquisition boom of the late 1980s forced companies to develop strategies to thwart would-be takeovers. Killer bees, named for the insect that aggressively swarms and overpowers its victims with hundreds of stings, act aggressively on behalf of a firm that is under the threat of an unfriendly or hostile takeover. The killer bee may employ tactics such as making the target company less attractive or more difficult to acquire.