A "Bear Hug" is an offer to buy a publicly listed company at a significant premium to the market price of its shares, designed to appeal to the target company's shareholders. It's an acquisition strategy used to pressure a reluctant company board to accept the bid or risk upsetting its shareholders.The goal of a bear hug is typically either1- To gain control of the target company without paying a premium over market prices or2- To force the board of directors of the target company into selling it at less than fair value.The latter goal may be accomplished by making it difficult for shareholders not supportive of sale negotiations process and/or by threatening them with being bought out at even lower prices if they do not sell quickly.When used as part of takeover bid, this maneuver is often referred as “Pac-Man defense” after popular 1980s arcade game in which player tries consume all dots on screen while avoiding ghosts chasing him.
