In defending against hostile takeover attempts, a company will approve anti?takeover amendmentsto the corporate charter that constrain the firm's ability to transfer managerial control of the firm asa result of a merger. This is called the __________ strategy.
A) poison pill
B) greenmail
C) shark repellent
D) golden parachute

Question

Quizplus · Accepted Answer

The strategy being described is commonly known as "shark repellent." This term refers to provisions in a company's charter that serve to repel or deter potential hostile takeovers. These provisions typically include restrictions on mergers and acquisitions that would result in a transfer of managerial control, as well as other measures such as staggered boards, supermajority voting requirements, and the like. The purpose of these provisions is to make it more difficult for an outside entity – i.e., a "shark" – to gain control of the company without the approval of the existing management team.

In Defending Against Hostile Takeover Attempts, a Company Will Approve