Bear Hug

1. In a situation of the hostile merger, the acquiring company may initiate a bear hug in which the merger proposal is delivered directly to the board of directors of the target company in the hopes of gaining board support for the proposed merger before management can react to the proposal.
2. If the bear hug is not successful, the acquirer may appeal directly to the target's shareholders:
• through a tender offer in which the acquirer offers to buy shares directly from shareholders or
• through a proxy fight in which a proxy solicitation is used to convince shareholders to elect a board of directors chosen by the acquirer. The board of directors would then replace the target company's management and allow the merger to move forward.