What is a Saturday Night Special? Definition, History, and Impact

A Saturday night special refers to a now obsolete takeover strategy wherein a company attempts to acquire another by making a sudden public tender offer, usually over a weekend. This tactic, popular in the 1970s, aimed to catch the target company off guard by offering a limited timeframe for response, typically just a few days. The term originated from the 1975 public relations campaign against Colt Industries’ hostile tender offer for Garlock, a mechanical packing devices manufacturer.

A tender offer is a public solicitation to shareholders to sell their shares at a specific price, often at a premium to the current market value. The Saturday night special technique gained traction in the 1970s when only seven days were required between the announcement and the deadline of a tender offer. This short timeframe allowed acquirers to catch target companies off guard, especially when offers were made over weekends when markets were closed.

In essence, a Saturday night special reduced response time, putting the target in a vulnerable position and potentially facilitating an easier acquisition by the bidder.

The term “Saturday night special” gained prominence in 1975 during a public relations campaign against Colt Industries’ hostile takeover bid for Garlock.

The effectiveness of the Saturday night special diminished when regulatory changes extended the response time for tender offers from seven days to at least 20 business days. Additionally, the Williams Act required disclosures for acquisitions of 5% or more of equity to the Securities and Exchange Commission (SEC). These changes rendered the quick-strike strategy ineffective.

Advancements in information technology and changes in regulatory frameworks have made it increasingly difficult for acquirers to surprise their targets. Today, rapid information exchange and media coverage make it challenging for potential bidders to execute stealthy takeover attempts. Instead, takeover attempts are often well-publicized, with acquirers leveraging various media channels to influence public perceptions in their favor.

The Saturday night special strategy was effective due to its ability to catch target companies off guard by offering a limited response time for tender offers, typically just a few days.

The decline of the Saturday night special was primarily attributed to regulatory changes that extended the response time for tender offers and required disclosures for significant equity acquisitions.

Advancements in information technology facilitated rapid information exchange, making it increasingly difficult for acquirers to execute stealthy takeover attempts. Additionally, changes in regulatory frameworks rendered the strategy obsolete.