New York, NY business attorney Richard S. Green explains how a hostile takeover works. He explains that a hostile takeover occurs when one party makes an unsolicited and uninvited bid for another company, in contrast to situations where a company is actively seeking to sell itself and is receptive to potential buyers. In a hostile takeover, the initiating party acts without the target company’s consent, effectively putting the company “in play,” which prompts the target to explore alternative options.

He notes that it is more common to see scenarios where a company announces a friendly, negotiated transaction, only for a third party to submit an uninvited bid for the target. A recent example involves Frontier’s proposed acquisition of Spirit Airlines, which was met with a hostile counteroffer from JetBlue. This intervention ultimately led to the termination of the original deal, with JetBlue now pursuing an attempt to acquire Spirit.