Once an unfriendly takeover attempt has been initiated, the target company's management can employ various other antitakeover measures to deter a takeover, including when the takeover candidate can attempt to buy back its shares, at a premium over the shares' market price, from the company or investor who initiated the unfriendly takeover attempt. The amount of this premium is called ____.
A) blackmail
B) greenmail
C) white knight
D) poison pills

Question

Quizplus · Accepted Answer

The premium offered by the target company to buy back its shares and deter a takeover attempt is called greenmail. Blackmail involves threatening to reveal embarrassing or harmful information about a person to obtain something in return. A white knight refers to a friendly third party that comes in to rescue the target company from a hostile takeover. Poison pills are antitakeover measures that make the target company less attractive to the acquirer by diluting the value of its stock or increasing its debt.

Once an Unfriendly Takeover Attempt Has Been Initiated, the Target