The first hour of Succession’s season 2 is all business. After the first season’s lethal finale, the show steps away from the human drama and takes us back to the world of high-powered executives and hostile takeovers.
Season 1’s parting gut punch to Logan Roy was a “bear hug” offer to buy Waystar Royco, led by his own son Kendall and a rival media executive. The idea behind a bear hug is that it’s an offer so good that the company being taken over has no choice but to sell. Season 2’s premiere is all about Logan trying to figure out his options, but with business buzzwords rushing by at the speed of light, it’s worth taking a second to figure out the real-world implications of Succession’s market mumbo-jumbo.
[Ed. note: This article contains spoilers for Succession season 2 episode 1.]
How to fend off a bear hug
Succession’s first season did quite a good job of convincing us that corporate bear hugs leave the defending company with little to no options — and that’s still true — but it doesn’t mean that Waystar Royco is leaving Roy hands just yet. Generally, the way a bear hug works is that the aggressors send a private letter to the company they’re trying to buy; a few days later, they take that letter public. In this episode, Sandy and Stewy going public with their intention to buy Waystar Royco is what opens the episode, causing Kendall to get pulled out of his rehab facility in … Iceland?
Both in the real world and in the show, once the letter goes public, it’s a race to reach the board of directors — the group of people who supervise and govern a company’s activities in the interest of its shareholders. Ultimately, the decision to sell will lie with the board. Both the prospective buyers and the prospective sellers attempt to make contact with as many board members as possible, looking to get them to come their side.
In the case of the Roys, that means convincing the board that Waystar’s future value is higher than what the potential buyers are offering, and that the Roy family can help it reach that value. That’s why it’s vital for Kendall, who was previously allied with Sandy and Stewy, to go on TV and say he had more confidence in “Dad’s plan” — the board could get the idea that Logan staying at the helm would be better than the takeover option. It’s also the reason Logan needs to announce a successor: That way, the board’s confidence wouldn’t rest solely in Logan, who recently had a brain aneurysm.