If a bidding firm wishes to bypass the board of directors of the target firm and deal directly with the shareholders of the target firm, the bidding firm should attempt to acquire the target firm via a:
A) Consolidation.
B) Merger.
C) Stock acquisition.
D) Leveraged buyout.
E) Going-private transaction.

Question

Quizplus · Accepted Answer

A stock acquisition allows the bidding firm to purchase shares directly from the shareholders of the target firm, bypassing the board of directors. This method involves buying the shares of the target company's stock directly from the shareholders, often through a tender offer, where the bidding firm proposes a specific price to buy the shares directly from the shareholders.

If a Bidding Firm Wishes to Bypass the Board of Directors