raider

play
noun raid·er \ ˈrā-dər \
Updated on: 26 Jul 2017

Definition of raider

:one that raids: such as
a :a fast lightly armed ship operating against merchant shipping
b :a soldier specially trained for close-range fighting
c :one that attempts a usually hostile takeover of a business corporation
  • corporate raiders

Examples of raider in a Sentence

  1. The village needs protection from enemy raiders.

  2. Raiders had emptied the tomb of treasure.

  3. He made his fortune as a corporate raider.

Recent Examples of raider from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'raider.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of raider

1861


Financial Definition of RAIDER

raider

What It Is

In the finance world, raider is short for corporate raider, which is a person or entity that purchases a company for the sole purpose of selling off its assets.

How It Works

Raiders are attracted to companies whose assets have book values that are higher than their market capitalizations. For example, let's say Company XYZ is a shoe company that owns several factories on prime pieces of real estate, has several patents in shoe technology, and owns a variety of other assets, all worth about $250 million today. However, Company XYZ's "New Feet" line has been a bust and the stock is only worth $1 a share, making the company worth, say, $100 million today. Accordingly, a raider might see that he or she can purchase the company for $100 million and the put the assets up for sale, making a cool $150,000,000 profit.

Why It Matters

Corporations that operate for a profit are legally obligated to act in the best interests of their owners -- the shareholders. What constitutes "the best interests of the shareholders" is a matter of debate, but when raiders become involved with a company, the company's managers must be more prepared to defend the decisions they make regarding how they have spent shareholder money. Many investors value raiders' ability to get an undervalued companies "back on track," as well as the fact that when they make money doing so, the rest of the shareholders benefit too.

One of the most famous raider stories involves the $25 billion takeover of RJR Nabisco by private equity firm Kohlberg Kravis Roberts in 1989. The deal was so famous (and so brazen) that it was immortalized by the book and movie Barbarians at the Gate. In those days, many companies used leveraged buyouts to purchase undervalued companies (that is, they would borrow all or most of the purchase price) only to turn around and sell off the assets.

Carl Icahn was a corporate "raider" in the 1980s and made millions buying and selling companies. Later, he became more known as an activist shareholder -- a person who buys a substantial portion of a company's shares and then pressures management to take actions that are sometimes uncomfortable but ultimately in the best interest of the shareholders.


RAIDER Defined for English Language Learners

raider

play
noun

Definition of raider for English Language Learners

  • : a person who suddenly and unexpectedly attacks a place or group

  • : a person who enters a place in order to steal or take something

  • : a person who tries to take control of a business by buying a lot of its stock


Law Dictionary

raider

noun raid·er

legal Definition of raider

:one that attempts a usually hostile takeover of a business corporation — compare white knight


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