Kamikaze Defence

Kamikaze Defence is a takeover defense strategy used by a company facing a hostile takeover attempt. The company deliberately engages in actions that could harm its value or make it less attractive to the acquirer, such as issuing debt, selling off key assets, or taking on riskier projects. While this strategy may prevent the takeover, it also risks damaging the company’s long-term prospects and shareholder value. The term originates from the Japanese military tactic where deliberate self-sacrifice was used to achieve strategic goals.

Example

A company issues a large amount of high-interest debt to make itself less attractive to a potential acquirer, thereby implementing a Kamikaze Defence to ward off the hostile takeover.