Bear Hug

Bear hugs are acquistion offers made to buy another company’s shares at a price far above their value. Note that how much a company is worth is generally subjective, but it is not that difficult to say with certainty whether the price offered is extravagant or not.

Bear hugs offers are usually made when the acquisition company is unsure whether the target company will accept its offer. However, even if an acquisition is successful, it may result in a Pyrrhic victory due to overpaying.