Bids of these kinds are usually made by other businesses who have new ideas for how to unlock value in the target company.

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With Clear Channel's stock trading well below its buyout value, lenders to the private equity consortium now face the prospect of lending far more than the current market value of the target company, and at a time when banks are already nervous about making loans.

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That's because forming a joint venture with a company before trying to buy it gives a company inside information about the target's worth and the value of the research it is seeking to acquire.

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In February 1999, when Boeing's share price was last almost as low as it was recently, Mr Condit warned his top managers that the company was theoretically a takeover target, as its market capitalisation fell below net asset value.

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This addresses a major concern with the repricing of stock options after company value falls: Repricing rewards the CEO for failure by giving him a lower stock-price target to reach.

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