Or it might require or urge existing management to do something different. There is another possibility. Tender offers are regulated under the federal Securities laws, and in particular, the Securities Exchange Act of 1934 and the rules and regulations thereunder. In a tender offer, the tender offeror will try to acquire the shares of the target from the shareholders. Companies that want to defend themselves against hostile acquirers have a variety of options available to them.
Termination fees are payable to that bidder if the company sells to another bidder.
Lock-ups are deals to sell the company's best assets to the bidder if the deal falls through. Both termination fees and lock-ups discourage other bidders, by making the target company worth less to anyone other than the favored bidder. If the company agrees to pay a termination fee to bidder A, bidder B will have to pay at least as much more as the termination fee to 'match' bidder A's price. Another party will scarcely want a corporation post-recapitalization, when lots of money has gone out of the corporation and the corporation almost certainly now has a huge debt load. In a management buy-out, members of management would buy the shares of the company, again loading up the company with debt to repay the borrowing.