What is Bankmail Engagement?
In the context of corporate finance and mergers and acquisitions, a bankmail engagement is an arrangement between a bank and a target firm in which the bank agrees to refuse to finance a hostile takeover attempt by another acquirer. A hostile takeover is a type of acquisition in which the acquirer attempts to acquire the target firm without the approval of the target's board of directors or management.
In a bankmail engagement, the target firm typically seeks to protect itself from hostile takeovers by entering into an agreement with one or more of its banks. Under the agreement, the bank(s) agree to refuse to provide financing for any hostile takeover attempt, either through loans or the underwriting of securities.
The goal of a bankmail engagement is to make it more difficult for an acquirer to successfully complete a hostile takeover, as the lack of financing can be a significant obstacle. However, it is important to note that a bankmail engagement is not a foolproof defense against a hostile takeover, as an acquirer may still be able to find alternative sources of financing or pursue other tactics to complete the acquisition.