The management of Traynor Enterprises is ﬁghting a takeover attempt led by one of its shareholders. To try and stop this takeover, management decides to offer the shareholder $50 a
Share if she will sell all of her shares in the ﬁrm. Traynor stock is currently priced at $36 a share. This
Offer is an example of:
A) A poison pill.
B) A share rights plan.
C) Greenmail.
D) A bear hug.
E) A golden handshake.

Question

Quizplus · Accepted Answer

Greenmail is a strategy where a company buys back its own shares at a premium from a hostile shareholder to prevent a takeover.

The Management of Traynor Enterprises Is ﬁGhting a Takeover Attempt