Which one of the following is a characteristic of an acquisition by stock?
A) Shareholders must vote and approve an acquisition.
B) The target firm's management can be bypassed by the use of a tender offer.
C) Complete absorption of one firm occurs in an acquisition.
D) Minority shareholders are ignored in the acquisition process.
E) The acquisition cost is normally lower than that of a merger.

Question

Quizplus · Accepted Answer

In an acquisition by stock, the acquiring company can bypass the target firm's management by making a tender offer directly to the shareholders, offering to buy their shares at a specified price. This allows the acquiring company to gain control without needing the approval of the target company's management.

Which One of the Following Is a Characteristic of an Acquisition