Takeover Artist

What is ‘Takeover Artist’

An investor or company whose primary goal is to identify companies that are attractive to buy and that can be turned around to make a profit. A takeover artist will usually use a lot of debt (leverage) to make the purchase, and restructure the company for resale or add the company to an existing group of companies.

Explaining ‘Takeover Artist’

Takeover artists are also sometimes referred to as corporate raiders. Frequently, the reason for a takeover is to remove entrenched management that the corporate raider believes is incompetent. For example, in the 1980s, Carl Icahn (a well-known takeover artist), launched a takeover of Trans World Airlines and turned the company from an unprofitable company to a profitable one in a few short years. He took the company from a loss of $193 million in 1985 to a profit of $106 million in 1987, and $250 million the next year. However, it was short-lived, as Trans World Airlines posted a $298 million loss in 1989.

Further Reading

  • How movies created the financial crisis – heinonline.org [PDF]
  • From ambushes to golden parachutes: Corporate takeovers as an instance of cultural framing and institutional integration – www.journals.uchicago.edu [PDF]
  • Discouraging rivals: Managerial rent-seeking and economic inefficiencies – www.nber.org [PDF]
  • Shareholder wealth effects of corporate takeovers: the UK experience 1955–1985 – www.sciencedirect.com [PDF]
  • Takeovers: Folklore and science – papers.ssrn.com [PDF]
  • Ancient redwoods and the politics of finance: The hostile takeover of the Pacific Lumber Company – www.sciencedirect.com [PDF]
  • Law and the Theory of Finance: Some Intersections – heinonline.org [PDF]
  • Europe's Thirteenth Directive and US takeover regulation: regulatory means and political and economic ends – heinonline.org [PDF]
  • Looting: the economic underworld of bankruptcy for profit – www.jstor.org [PDF]