Anavex Life Sciences Corp (AVXL)

[wildcard235]

A merger or acquisition can be friendly or hostile.

Missling and Skarpelos are not interested in a friendly takeover at this point, and I think they are wise to avoid that at least until after we have our first FDA approval.

Hostile takeover attempts are rare because they usually fail after costing a fortune. There are laws that control what a takeover target can do to try to avoid being taken over, and it appears that Anavex is being advised in that area.

A takeover target may invoke a variety of tactics to fight the takeover, or if they fail to remain independent, to get the highest possible price. For example, certain actions by a hostile company might trigger the takeover target to implement an auction process, increasing the number of buyers and bidding up the offers. The company might be taken over, but not by the original hostile company.

If Company B tries to takeover Company A, but a bidding war occurs and Company C wins, Company B may be worse off than if Company A had remained independent and had partnered with Company B instead. Negative possible outcomes like that are why companies are very reluctant to make hostile takeover attempts.