When the target company uses the tactic of divestiture, to defend itself from a hostile takeover, it is said to sell the :
Crown jewels
Option 1 — Crown jewels is correct.
In a hostile takeover the acquirer usually covets the target’s most valuable and attractive assets or divisions — its ‘crown jewels’. Under the crown-jewels defence the target deliberately sells or spins off those prized assets (a divestiture), so that it becomes far less appealing and the raider withdraws.
Why the other options are wrong:
| Term | What it really means |
|---|---|
| Green mail | Buying back the raider’s shares at a premium to make them go away |
| Golden parachutes | Large severance payouts promised to top executives if they are ousted after a takeover |
| White knight | A friendly third party invited to acquire the target instead of the hostile bidder |
Only the crown-jewels tactic involves selling off assets by divestiture, which is exactly what the question describes.
Takeaway: Selling the prized assets (divestiture) to repel a raider is the crown-jewels defence.
Similar Questions
Pan Amsat developed a joint venture with Jsat Corporation to develop and send into orbit a small satellite. Which type of alliance the above statement represents ?
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__________ signals a strategic inflection point necessitating a radical strategic shift.
Match the items of List - I with List - II and select the code of correct matching :
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Which among the following is not a generic strategy ?
Which one among the following is not a correct statement ?
Which of the following statements is not correct about strategic management ?
Vertical merger is the merger of two firms which are involved in which one of the following forms ?
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Important Questions from Strategic Management
- Strategic Management involves :
(a) Assessment of external environment
(b) Identification of subsystem
(c) Unity of command
(d) Span of control
(e) Assessment of resources and capabilities
(f) Identification of goal
Code : Put the following steps of strategic Management Process in correct sequence :
a. Scanning and Evaluation of Business Environment
b. Formulating strategies
c. Implementation of Corporate Strategy
d. Deciding about the Mission of the organisation
e. Setting Corporate Level Objective
Codes :
Pan Amsat developed a joint venture with Jsat Corporation to develop and send into orbit a small satellite. Which type of alliance the above statement represents ?
Who among the following has given the statement : “transition from single function focus to a multi function focus is essential for successful strategic management”?
__________ signals a strategic inflection point necessitating a radical strategic shift.
