Bear Hug Letter (M&A Glossary)

Summary

A letter to the target’s board of directors or management that sets forth an offer to buy the target at a price far in excess of its current value. Bear hug letters are typically sent by a hostile buyer who doubts that the target’s management is willing to sell. A bear hug letter may be submitted to the target’s board privately or be done with a public announcement. Given the board’s fiduciary duties, it may prove difficult to reject a bear hug letter that offers a substantial price premium.