In a news release that was oddly reminiscent of the big-city dating scene, Jones Apparel Group
To sum up: Jones offered $20 per share in cash in an unsolicited bid in February; Maxwell balked. Jones tried a hostile takeover a month later; Maxwell told its investors to stay away, and they did. Jones bumped its offer to $22.50 in late May; a while later, Maxwell shot back with a statement calling the second offer, like the first, "financially inadequate."
And yesterday, Jones unexpectedly said it's in "talks" with Maxwell's management about a $23.25-per-share offer, subject to the companies hammering out a merger agreement, Maxwell's board approving it, and all of this happening before Friday. (Jones' tender offer is set to expire Friday, and Jones is demanding that it either have a merger agreement in its hot little hand or Maxwell investors tender enough shares to it that it can reshape Maxwell's board in its image by that date.)
This is a perfect illustration of the sort of chicken game (makes you think of the tractor duel in Footloose, doesn't it?) that hostile and/or unsolicited buyout offers often represent: They're invariably exciting to watch, but can be nerve-racking if you've got something invested. These kinds of offers have been in the news a lot lately, from Oracle's
Sometimes the companies reach a deal; sometimes they come to an impasse; and sometimes a white knight comes in and plucks the takeover target out of the would-be acquirer's grasp, as Aventis
Given the publicity that such discussions sometimes get, it can be tempting for investors to attempt to "play" hostile deals for quick gains, but beware: Some research suggests that deals of this sort -- and the negotiations that accompany them -- reflect conscious strategic maneuvers (pdf file) most individual investors aren't privy to. That adds an extra layer of challenge to any analysis of a potential deal and both its short- and long-term impact.
Fool contributor Dave Marino-Nachison misses Grandpa Harold. He owns shares in Oracle.
