The BCQ company has been going through challenging times lately. Due to a combination of unfavourable market conditions, investments in the wrong projects and more negligent management, BCQ will soon experience a deterioration of its business. So far, this is insider information and for the time being, BCQs share price does not reflect the expected drop in BCQs value. Yet the market will catch up soon.

BCQ is desperate to avoid a large decrease in its share price as it is worried that news of mismanagement may attract the attention of corporate acquirers. BCQs managers will likely lose their jobs then and this is something they want to avoid.

BCQ believes that an attack will be the best defence and is seriously considering adopting some aggressive anti-takeover measures. The suggestion that has gathered most support is to take over another company. The key idea behind such an acquisition is not entering new markets, benefiting from economies of scale, scope, or diversification, but increasing BCQs size so that it would become bigger and hence tougher for others to acquire.

BCQ does not want to waste time searching for the perfect target because time is of the essence and the paramount criterion is the targets size. Hence, BCQ is ready to acquire a large company that is being sold through an auction in the very near future. To expedite the acquisition process further, BCQ is trying to convince the seller to sell before the auction by offering a price the seller cannot refuse. This all will certainly make it impossible for BCQ to conduct due diligence of the target. The due diligence would be very restricted anyway, offering little new information, as it would be organised by the targets investments bank. What matters is that BCQ would get much bigger and protect itself well against external predatory interest.

Briefly but carefully discuss whether or not you agree with this approach and why.

Please align your thinking toward EITHER these Merger & Acquisition topics: M&A Context and Implications, Due Diligence, SPACs, Synergies, Contingent Value Rights, Comparable, Negotiations.