raider

A raider is a person or entity that attempts a hostile takeover of a company. Raiders usually target companies with potentially valuable assets, acquire funding to buy enough shares for controlling interest in the target and then break up the company, selling its assets for a profit.

A corporate raider gains control of enough outstanding shares to replace the board of directors before approving an asset sale. Corporations have developed several techniques including poison pills, staggered boards, golden parachutes, greenmail, and white knights to offset the threat that a raider could pose to the business.

[Last updated in August of 2023 by the Wex Definitions Team