17 Questions
What type of merger involves the target's industry buying or selling to the acquirer's industry?
Vertical Merger
During which market phase is merger activity typically greater?
During economic expansions
Which reason for acquisition involves savings from producing goods in high volume?
Economies of Scale
What term describes peaks of heavy takeover activity followed by a few transactions?
Merger Waves
Which type of merger involves the merger of two companies in the same industry that make products required at different stages of the production cycle?
Vertical Integration
What mechanism is used when target shareholders swap their old stock for new stock?
Stock Swap
Which takeover process involves comparing the target to similar firms to gain a rough estimate of value?
Valuation Process
What is a common reason the board may not approve a premium offer in a takeover?
Might believe the acquirer is undervalued
What are Revlon Duties typically associated with?
Seeking the highest value in a takeover
How do staggered boards impact corporate governance?
Only allow a portion of directors to be elected each year
What is the purpose of a 'poison pill' defense in a takeover?
Make it harder for unwanted takeovers
In what situation would 'white squire' likely be involved?
When a large investor purchases shares with voting rights
What does a 'freezeout merger' primarily involve?
Acquiring control through a tender offer and forming a new entity
What is the main purpose of 'golden parachutes' in a takeover scenario?
Guarantee lucrative severance packages to senior managers
'Toeholds' in a takeover context typically refer to:
Initial ownership stakes used to initiate takeover attempts
'Leveraged buyouts' often involve:
'Shell corporations' borrowing to acquire companies
'Proxy fights' in takeovers primarily aim to:
Entrench management more securely in the target company
Learn about different mechanisms and types of mergers in the market, including horizontal, vertical, and conglomerate mergers. Explore the concept of merger waves and the factors influencing merger activity.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
