Roger is a major shareholder in RB Industrial Supply. Currently, Roger is quite unhappy with the direction the firm is headed and is rumored to be considering an attempt to take over the firm by soliciting the votes of other shareholders. To head off this potential attempt, the board of RB Industrial Supply has decided to offer Roger $36 a share for all the shares he owns in the firm. The current market value per share is $32. This offer to purchase Roger's shares is commonly referred to as:

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The offer to purchase Roger's shares at a premium above the market price is known as greenmail. The board is essentially trying to avoid a takeover attempt by buying off a major shareholder. A poison pill is a defensive strategy implemented by the company to dilute the value of shares in the event of a hostile takeover. A white knight refers to a friendly company that comes to the aid of a target company to avoid a hostile takeover. A golden parachute is a compensation package designed to provide executives with significant financial benefits in the event of a takeover, while standstill payments refer to payments made to a shareholder to agree to not acquire more shares or launch a takeover bid for a set period of time.

Roger Is a Major Shareholder in RB Industrial Supply