15 Questions
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
What is the name of the process by which a company acquires the remaining shares of a target company after a successful tender offer?
Squeeze-out
Under the Delaware General Corporation Law, which party owes fiduciary duties to the shareholders?
The board of directors
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
What is the term for a takeover attempt where the target company's management resists the acquisition?
Hostile takeover
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
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
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
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
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
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
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
Which of the following is a consolidation method that may be employed in conjunction with a tender offer?
Statutory merger
What is the primary consideration for a board of directors when evaluating a tender offer?
Maximizing shareholder value
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
Test your knowledge of corporate takeovers, including hostile takeovers, proxy contests, and squeeze-outs. This quiz also covers fiduciary duties, appraisal rights, and defensive strategies like poison pills. Essential for finance and law students.
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