The ABC Company contacts the shareholders of XYZ Company and offers to buy their shares at a premium. This is an illustration of a:
A) Leveraged buyout.
B) Going-private transaction.
C) Tender offer.
D) Vertical acquisition.
E) Conglomerate acquisition.

Question

Quizplus · Accepted Answer

A tender offer is when a company or individual proposes to buy shares directly from the shareholders of another company at a specified price, usually at a premium to the market price. This is exactly what ABC Company is doing by contacting XYZ Company's shareholders and offering to buy their shares at a premium.

The ABC Company Contacts the Shareholders of XYZ Company and Offers