Saying ‘NO’ sounds in theory, but far from easy in practice. Ultimately corporate decisions are also driven by investor demands.
Consider the pharmaceutical sector (2014). Investor obsession with M&A led to Allergan (highly respected company/ management) being subject to an extremely hostile, toxic takeover battle. Management said ‘NO’ to being acquired and resisted pressure to do value-destroying acquisitions instead. Yet despite the solid business case for AGN to remain independent, the firm was ultimately forced to capitulate and was acquired by a ‘white night’.
It was then an ‘eat or be eaten’ world in pharma, where investors/ management became irrationally focused on M&A. Until, of course, the bubble finally burst a year later.