war chest

War Chest

Slang for the reserve of cash a corporation sets aside to attempt a takeover or to defend against a hostile takeover.

Investopedia Commentary

For example, you might hear, "Look for XYZ Company to make an acquisition soon they've been selling off assets in order to build up their war chest."

Related Links

The Basics of Mergers and Acquisitions
The Wacky World of M&As
War's Influence On Wall Street

See also: Acquisition, Takeover, War Babies

war chest

Liquid assets accumulated by a firm to use in a potential acquisition or in defending itself against a takeover attempt. A substantial war chest adds security and enhances investment opportunities but is likely to be a drain on short-term profitability.