The news is about a hostile takeover. What is being hostile in takeover? It is said to be the one without the permission of the company. But, who is the company? If the company have many shareholders, who do we call the company? Are the people who manage the daily operations like the CEO and other senior management to be called the company? Or are the opportunistic founders (or myopic) who had sold the company for a price earlier? To be called so? What are the rights left for the founder of a company after its sale? These are some of the exciting questions one can ask in the context of Mindtree takeover.
Every company will possess founders or promoters. However, when they sell the shares of the company to someone else, the company changes. Is a firm or company implies the name of the registered entity? Let us take an analogy, can we call ourselves the same after our soul has been replaced by someone else’s? Although both body and name will remain the same, the soul which defines the character and personality is changed. Then it will not be appropriate to conclude that it is the same individual. Similarly, when the owners of a company change, the old company cease to exist and new company forms. 51% is cut-off beyond which in legal terms the soul of a company is determined.
Another interesting point is, about the customers’ role in the ownership of a company. Everyone knows that no company exists without customers. So, which owner are we talking about, when the customers are no longer interested in a company? Surprisingly, nobody speaks about the customer when hostile takeovers happen.
Before we call a takeover hostile or not, we need to think from the perspective of who?