Deck 6: Takeover Tactics

Question 1

Bange and Mazzeo found that target companies whose CEO and chairman were the same person were more likely to be recipients of bypass offers.

Answer 1

True

Question 2

In a bear hug the bidder makes an overture directly to the target company's shareholders.

Answer 2

False

Question 3

Answer: Research has showed that "bad bidders" are no more likely to become targets of takeover bids.

Answer 3

False

Question 4

Which of the following are used to implement a hostile takeover of a target?

A) Poison pill
B) Tender offer
C) Corporate charter amendments
D) All the above

Question 5

In the United States, following the receipt of a tender offer from a bidder, the target must respond by filing a:

A) Schedule TO
B) Schedule 13F
C) Schedule 14D-9
D) Schedule 10K

Question 6

In the United States, once accumulating 5% or more of a target's shares the bidder must file a Schedule 13D within:

A) 5 days
B) 10 days
C) 20 days
D) None of the above

Question 7

Research shows that bypass offers tend to have:

A) Higher takeover premiums
B) Lower takeover premiums
C) No impact on takeover premiums
D) None of these

Question 8

Which of the following professionals are often members of a bidder's tender offer team?

A) Lawyers
B) Investment bankers
C) Accountants
D) All the above

Question 9

The target will generally pay the insurgent's costs of a proxy fight even if the fight is not successful.

Question 10

Assume that Company A makes a $40-per-share offer for Company B, which now trades at $30 per share. Also assume that the deal is expected to close in 90 days. If the deal closes, then the risk arbitrager's return would be:

A) 20%
B) 30%
C) 35%
D) 50%

Question 11

Bris found that toeholds were used in what percent of the tender offers he examined?

A) 30%
B) 75%
C) 15%
D) Nearly 100%

Question 12

Listokin found that dissidents' victories in proxy contests did what over his study period in the 2000s:

A) Increased over time
B) Decreased over time
C) No discernable pattern
D) None of the above

Question 13

Toeholds are usually established in the vast majority of tender offers.

Question 14

Answer: Borstadt and Swirlein shows the dissidents were successful in their proxy fights

A) Most of the time
B) No consistent pattern
C) 42% of the time
D) Almost 80% of the time

Question 15

The tender offer was first introduced in the Inco-ESB takeover battle.

Question 16

Betton and Eckbo found out that toeholds are associated with higher tender offer premiums.

Question 17

Sridharan and Reinganum found out what about the factors which determine the selection of a proxy fight instead of a tender offer by a bidder:

A) Proxy fights will be used when the target's performance has been poor
B) Tender offer will be used when the target has little debt
C) Proxy fight will be used when a prior tender offer has failed
D) None of the above True or False Questions

Question 18

Research shows that once a proxy fight begins, it is more than likely that there will eventually be significant changes in the operation and even independence of the target company.

Question 19

Two-tiered tender offers are sometimes referred to as front-end-loaded tender offers.

Question 20

In the United States two-tiered tender offers are not that common any more.