An astute bidder should always analyze the target firm's possible defenses such as golden parachutes for key employees and poison pills before making a bid.

Question

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It is important for a bidder to analyze the target firm's possible defenses, such as golden parachutes and poison pills, before making a bid. These defenses can make the acquisition more difficult, expensive, or unattractive, and therefore affect the bidder's strategy and valuation. By identifying and evaluating these defenses in advance, the bidder can adjust its offer accordingly, negotiate with the target firm, or consider alternative acquisition targets.

An Astute Bidder Should Always Analyze the Target Firm's Possible