What is a requirement for the target company board during a takeover?

The requirement for the target company board during a takeover to act in the interests of the company as a whole is fundamental to their fiduciary duties. This means that the board must prioritize the overall well-being of the company, considering the long-term consequences of their decisions for all stakeholders, which includes shareholders, employees, and customers.

During a takeover scenario, the board is faced with evaluating the offer from the acquiring company and determining its potential impact on the company's future. By acting in the interests of the company as a whole, the board is expected to assess whether the offer aligns with the company's strategic goals and whether it maximizes shareholder value while considering other stakeholders' needs. This holistic approach is essential, as failing to do so could lead to legal repercussions or damage to the company's reputation.

Fulfilling this duty involves engaging in careful deliberation, potentially seeking advice from financial and legal advisors, and communicating transparently with shareholders. It is their responsibility to decide whether to recommend acceptance of the takeover or to oppose it, always guided by what they believe to be in the best interests of the company overall.