The multiple option bidding strategy introduces a certain level of uncertainty in determining the amount of cash the acquirer will have to ultimately pay out to target firm shareholders, since the number choosing the all cash or cash and stock option is not known prior to the completion of the tender offer.

Question

Quizplus · Accepted Answer

The statement is true, as the multiple option bidding strategy introduces uncertainty in determining the amount of cash the acquirer will ultimately have to pay out to target firm shareholders. This is because the number of shareholders choosing the all cash or cash and stock option is not known prior to the completion of the tender offer.

The Multiple Option Bidding Strategy Introduces a Certain Level of Uncertainty