Which of the following is true of a tender offer?
A) It is another form of put option.
B) The management of the target company has the exclusive right to accept the offer.
C) The target firm may take defensive tactics to ward off the offer.
D) It facilitates negotiations for an acquisition.

Question

Quizplus · Accepted Answer

A tender offer is an offer by a potential acquirer to buy a substantial percentage of the target company's shares from its shareholders at a premium over the current market price. The target firm may take defensive tactics to ward off the offer, such as implementing a poison pill or a white knight strategy. The management of the target company does not have the exclusive right to accept the offer, and it is not another form of put option. While it can facilitate negotiations for an acquisition, that is not necessarily its sole purpose.

Which of the Following Is True of a Tender Offer