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Mergers and Acquisitions: Fiduciary Duties and Takeovers

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Mergers and Acquisitions: Fiduciary Duties and Takeovers

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Questions and Answers

What is the primary purpose of a poison pill in the context of a hostile takeover?

To prevent a hostile takeover by making it more expensive (correct)

To facilitate the acquisition of a target company

To allow shareholders to vote on a proposed merger

To increase the value of the target company's stock

What is the name of the process by which a company acquires the remaining shares of a target company after a successful tender offer?

Proxy contest

Squeeze-out (correct)

Appraisal rights

Hostile takeover

Under the Delaware General Corporation Law, which party owes fiduciary duties to the shareholders?

The company's management

The shareholders

The acquirer

The board of directors (correct)

What is the term for the right of shareholders to demand a fair value for their shares in the event of a merger or consolidation?

Appraisal rights Signup and view all the answers

What is the term for a takeover attempt where the target company's management resists the acquisition?

Hostile takeover Signup and view all the answers

Under Delaware General Corporation Law, what is the primary remedy available to minority shareholders who disagree with a merger?

Exercise their appraisal rights and seek a judicial determination of the fair value of their shares Signup and view all the answers

What is the main difference between a merger and a consolidation?

A merger involves the dissolution of one corporation, while a consolidation involves the creation of a new entity Signup and view all the answers

What is the role of fiduciary duties in the context of corporate restructuring?

To ensure that directors act in the best interests of the corporation and its shareholders Signup and view all the answers

What is the purpose of a Certificate of Merger filed with the Delaware Secretary of State?

To effect the merger and make it legally binding Signup and view all the answers

What is the significance of the Notice to shareholders in the context of a merger?

It serves as a formal notification of the merger and its effective date Signup and view all the answers

What is the potential implication of undertaking a tender offer and acquiring only 89% of the shares?

Triggering a short-form merger under Delaware General Corporation Law Signup and view all the answers

What is the primary purpose of a top-off rights offer in the context of a merger or acquisition?

To provide minority shareholders with a means of exit Signup and view all the answers

Which of the following is a consolidation method that may be employed in conjunction with a tender offer?

Statutory merger Signup and view all the answers

What is the primary consideration for a board of directors when evaluating a tender offer?

Maximizing shareholder value Signup and view all the answers

What is the potential consequence of a tender offer that does not result in the acquisition of 100% of the target company's shares?

Continued minority shareholder ownership and potential dissent Signup and view all the answers