The definition of a ‘Godfather offer’
Godfather offer irrefutable takeover offer made to the target company the acquiring company. Typically, the acquisition price premium is very generous compared to the prevailing market price. Therefore, if management of the target company rejects the offer, shareholders may initiate lawsuits or other forms of protest against the target company for not performing their fiduciary duties, looking in the best interests of shareholders.
Breaking down the ‘Godfather offer’
Godfather offer even more difficult to control the target company to refuse when its stock price was flat or declining over a long period of time, how long investors will jump at the opportunity to cash out at high price.
In fact, the proposed idea of the Cross not so much as offer a sly, but oppressive to require: do as I say or else.
The expression comes from the famous line — “make him an offer he can’t refuse” — shown in the film trilogy “the Godfather”. It is now one of the most famous quotes from American film.
In one of the film’s most famous scenes, don Vito Corleone (Marlon Brando) is visited by his godson, famous singer johnny Fontane (al Martino) – a characteristic that is considered to be based on Frank Sinatra, although many people associated with Sinatra and the film have denied this. Fontane asks for Vito’s help to secure a film role that will boost his fading career. The head of the film Studio, has previously refused to give Fontane, but don Corleone tells johnny:
“I’m gonna make him an offer he can’t refuse.”
Later, the Studio head awakes to find the severed head of his expensive racehorse in his bed. Not surprisingly, the fountain later this part.