Solved

Which of the Following Is Not a Correct Description of a Defensive

Question 113

Multiple Choice

Which of the following is not a correct description of a defensive strategy to a tender offer?


A) Selling a "crown jewel" refers to a sale by the target corporation of an asset that was particularly attractive to the tender offeror.
B) A "white knight" merger refers to a merger with a different purchaser that is friendlier toward management than the company that made the tender offer.
C) A "poison pill" is a strategy built into contracts, bylaws, etc., that can make any purchase of the corporation more expensive, such as leases that automatically expire upon the purchase and would require renegotiation, likely at a higher price.
D) Under a "standstill agreement," shareholders holding a large number of shares of the target corporation agree that no one of them will sell to the tender offeror, even if the tender offeror raises the offer price.
E) A "greenmail" payment is a payment, usually at greater than fair market value, made by the target corporation to the tender offeror for shares already owned by the tender offeror, in exchange for the tender offeror dropping the tender offer.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents