For a hostile takeover to succeed, the acquirer must appeal to the target shareholders; this is usually done through
A)a white knight and a proxy fight.
B)a staggered board and a white knight.
C)a tender offer and a proxy fight.
D)a tender offer and a poison pill.

Question

Quizplus · Accepted Answer

In a hostile takeover, the acquirer often uses a tender offer to directly purchase shares from the target shareholders at a premium price. This is a way to appeal to the target shareholders by offering them a better return on their investment than they would receive if they continue to hold onto their shares. A proxy fight may also be used to persuade shareholders to vote in favor of the acquisition. A staggered board and a poison pill may be used by the target company as defense mechanisms to make a hostile takeover more difficult or unattractive, but they do not help the acquirer appeal to the target shareholders. A white knight is a potential alternative acquirer who is more favorable to the target company than the hostile acquirer and who can be brought in to make a competing offer. While a white knight may be helpful in thwarting a hostile takeover, it is not a way for the hostile acquirer to appeal to the target shareholders. Therefore, choice C is the best answer.

For a Hostile Takeover to Succeed, the Acquirer Must Appeal