Corporate raid

In business, a corporate raid is the process of buying a large stake in a corporation and then using shareholder voting rights to require the company to undertake novel measures designed to increase the share value, generally in opposition to the desires and practices of the corporation's current management. The measures might include replacing top executives, downsizing operations, or liquidating the company.

Corporate raids were particularly common in the 1970s 1980s and 1990s in the United States. By the end of the 1980s, management of many large publicly traded corporations had adopted legal countermeasures designed to thwart potential hostile takeovers and corporate raids, including poison pills, golden parachutes, and increases in debt levels on the company's balance sheet.

In later years, some corporate raiding practices have been used by "activist shareholders", who purchase equity stakes in a corporation to influence its board of directors and put public pressure on its management.

Corporate raids became the hallmark of a handful of investors in the 1970s and 1980s, particularly highlighted by the public suicide of Eli Black. Among the most notable corporate raiders of the 1980s were Carl Icahn, Victor Posner, Meshulam Riklis, Nelson Peltz, Robert M. Bass, T. Boone Pickens, Harold Clark Simmons, Kirk Kerkorian, Sir James Goldsmith, Saul Steinberg and Asher Edelman. These investors used a number of the same tactics and targeted the same type of companies as more traditional leveraged buyouts and in many ways could be considered a forerunner of the later private equity firms. In fact it is Posner, one of the first "corporate raiders" who is often credited with coining the term "leveraged buyout" or "LBO"

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