Bear hug meaning

An unsolicited takeover approach in which a bidder proposes, and often publicises or quickly triggers disclosure of, a high‑premium offer to the target’s board. The price is pitched to be so attractive that the offeree board faces pressure from shareholders to engage or recommend, while discouraging rival bidders. “Bear hug” is market terminology, not defined in legislation or case law. In practice it describes: no prior agreement with the offeree board; an offer price significantly above the prevailing market price; publicity or required announcement that amplifies shareholder pressure and can create deal momentum. In the UK (England & Wales, Scotland and Northern Ireland), conduct and disclosure are governed by the Takeover Code (including Rule 2 on announcements and possible offer disclosures, Rule 2.6 “put up or shut up”, and Rule 21 on frustrating action). In Ireland, the Irish Takeover Rules contain equivalent provisions. Usage and effect are broadly consistent across these jurisdictions: once disclosure is triggered, the timetable and restrictions on defensive measures apply. Sometimes contrasted with a hostile bid, but the essence of a bear hug is the size and publicity of the premium rather than bidder hostility. See also virtual bid.