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Pac-Man Defense

09/09/16 What is the ‘Pac-Man Defense’?

what is the pac-man defense

When a counterbid is placed to prevent hostile takeover. (Black’s Law Dictionary)
The Pac-Man Defense is a defensive mechanism used against the hostile takeover, wherein the target firm turns around the table and acquires the firm that has made the hostile bid or has initiated the takeover.
In other words, a defensive strategy in which the firm facing the threat of hostile takeover “turns the tables” by acquiring its would-be buyer. This defense strategy has got its name from the popular video game Pac-Man, in which the Pac-Man initial objective is to escape the ghosts chasing him and once he consumes the power pill, he is able to turn around and eat the ghosts that are trying to eat him in a maze.

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