Question
Which of the following is a pre-offer takeover defence employed by target companies in hostile takeovers?
The correct answer is
Poison pills
Poison pills are shareholder-rights arrangements that can be adopted before a hostile bid. Triggering the rights can dilute the bidder’s stake or otherwise make acquisition costly. Greenmail and Pacman defence are responses to an existing takeover threat.
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Important Questions from Mergers and ACquisitions - Teaching
- It is an act of acquiring effective control by one company over assets or management of another company without any combination of companies ?
- Assertion (A) : In an industrial structure, the acquisition of an existing firm in the industry might be a better move than starting-up a new venture.
Reasoning (R) : There is evidence that internal development might be preferable to acquisition because of differences between culture and shared valued. - Which of the following is not the advantage of merger ?
Match each transaction type in List I with its specific hypothetical description in List II:
List I: Transaction type List II: Description (a) Merger into a single surviving company (i) The buyer purchases specified business assets, but no shares in the seller. (b) Asset-only acquisition (ii) With the target board’s support, the buyer acquires voting control through a share purchase; the target remains a separate company. (c) Friendly controlling-share acquisition (iii) Two companies combine legally into one surviving company, rather than remaining separate companies linked only by share ownership. (d) Hostile takeover bid (iv) A bidder pursues an offer for voting control directly to shareholders despite opposition from the target board. Choose the correct option:
Match each multinational-company staffing policy in List I with the approach in List II.
List I: Staffing policy List II: Approach A. Key overseas subsidiary positions are filled by nationals of the parent company’s home country. I. Polycentric B. Host-country nationals manage each foreign subsidiary, while parent-country nationals hold key headquarters positions. II. Geocentric C. The best-qualified candidates are selected for key positions worldwide, regardless of nationality. III. Regiocentric D. Managers may move between countries within a designated geographical region, but the staffing pool and transfers remain regionally bounded. IV. Ethnocentric Choose the correct matching from the options below:
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