Company A makes an offer to purchase all of the shares of Company B from Company B's shareholders. The board of directors of Company B does not feel that the offer is adequate and seeks out another purchaser who might offer more for the shares. This defence to the takeover is referred as:
A) White knight.
B) Pac-man defence.
C) Poison pill.
D) Selling the crown jewels.

Question

Quizplus · Accepted Answer

A "white knight" is a company that is sought out by a target company to prevent a hostile takeover by making a more favorable offer to purchase the company's shares. This defense strategy is often used by the target company's board of directors to protect the interests of the company's shareholders.

Company a Makes an Offer to Purchase All of the Shares