Deck 3: Legal Framework

Question 1

Research by Lisa Meulbroek empirically confirmed that stock price run-ups before takeover announcements often occur. This reflects:

A) Toeholds
B) Insider Trading
C) Anticompetitive behavior
D) None of the above

Answer 1

B

Question 2

In the United States under what rule or doctrine may targets take antitakeover actions that are reasonable and proportional to perceived threats to shareholder interests?

A) Revlon Duties
B) Unocal Standard
C) Microsoft Rule d Business Combination Standard

Answer 2

B

Question 3

In the United States when a company makes a bid directly to a target company's shareholders, it must file what form?

A) Schedule 14G
B) Schedule 13D
C) Schedule TO
D) It does not have to file any forms until after the deal is completed

Answer 3

C

Question 4

In the United States after shareholders tender their shares, they:

A) Cannot withdraw them
B) Can withdraw them at any time
C) Can withdraw them at the end of the year
D) Must sell them to a third party True or False Questions

Question 5

The European Union has finally adopted one consistent set of takeover rules which all members must abide by.

Question 6

Answer: The Celler-Kefauver Act required bidders and targets to file with the Justice Department and Federal Trade Commission in advance of completing a merger or acquisition.

Question 7

LBOs became increasingly popular during the fourth merger wave.

Question 8

In India, bidders who acquire what percent of a target's stock must disclose that holding within two days of attaining it?

A) 5%
B) 2%
C) 10%
D) 51%
E) Such disclosure is not required in India

Question 9

If less than the requested number of shares are tendered, the Williams Act requires that the bidder must purchase the amount that were tendered anyway.

Question 10

Bidders doing a mini-tender offer must file a Schedule TO within 20 business days from when the offer is announced.

Question 11

Answer: What transaction changed the way that Germany approached takeovers of German companies by non-German bidders:

A) Porsche v. Volkswagen
B) Vodafone v. Mannesmann
C) UBS v. Deutsche Bank
D) None of the above

Question 12

The eight-factor test comes from what notable case?

A) Edgar v. Mite
B) CTS v. Dynamics
C) Wellman v. Dickinson
D) United States v. Microsoft

Question 13

In Japan tender offers must be kept open for at least 20 calendar days but not more than 60.

Question 14

Aktas, DeBodt, and Roll found that the greater the adverse impact on European rivals resulting from deals by foreign companies, the more likely that regulators would move to oppose the deal.

Question 15

In the United Kingdom bidders who acquire 30% or more of a target's stock must bid for the entire company.

Question 16

The Securities Law of China requires holders of 5% or more of a target's stock to disclose this holding within three days of attaining that position.

Question 17

In the United States target shareholders must have at least what time period to consider the original bids in cases when there is a competing tender offer?

A) 10 days
B) 5 days
C) 2 days
D) One month

Question 18

In the United States when a bidder initiates an acquisition, it must file a Schedule 8K if:

A) The deal is hostile
B) Target's size represents more than 10% of bidder's assets
C) If requested by the FTC
D) None of the above

Question 19

Pursuant to the Sarbanes-Oxley Act the penalties for insider trading are up to $5 million and a possible jail sentence of up to 20 years.