A contract wherein the bidding firm agrees to limit its holdings in the target firm is called a:
A)supermajority amendment.
B)standstill agreement.
C)greenmail provision.
D)poison pill amendment.
E)white knight provision.

Question

Quizplus · Accepted Answer

A standstill agreement is a contract between a bidder and a target firm that restricts the bidder's purchases of the target's securities. This agreement is often used in hostile takeovers to prevent the bidder from acquiring a controlling interest. The agreement typically includes a provision that requires the bidder to limit its holdings in the target firm, usually to a specific percentage of outstanding shares. This ensures that the bidder cannot gain too much control over the target firm, and gives the target firm time to explore alternative strategies.

A Contract Wherein the Bidding Firm Agrees to Limit Its