Many mergers are the result of a friendly and collaborative agreement between th

Question

Many mergers are the result of a friendly and collaborative agreement between the participating companies. Some combinations, however, are unfriendly or even hostile in nature. Firms facing unwanted and hostile takeovers will often take actions to forestall the acquisition. In general, the broad category of antitakeover strategies are called Consider the following technique: This type of financial security will have value only if an unfriendly takeover occurs. It gives the firm's bondholders the right to redeem their bonds at their par value prior to maturity if a unfriendly bidder obtains control of a specified percentage of the target firm's common shares. This technique, which is called , is designed to: O Encourage executives to act in the best interests of their firm's common shareholders by providing the executives with financial security if they don't oppose a takeover but then lose their jobs O Make the takeover target a less attractive takeover candidate by restructuring its debt and reducing its available cash balances Make it significantly more difficult for the takeover vote by the firm's shareholders to be successful Many of these shark repellent defensive strategies must be put into place prior to the initiation of a possible takeover. of one of these strategies follows. Identify the antitakeover defense However, a target firm may use other strategies once an undesired takeover bid has started. A description This strategy involves making the target firm less attractive by either selling desirable assets or divisions, borrowing large sums of money, or repurchasing common shares This strategy is best described as the O Asset or liability restructuring defense O Litigation defense O Greenmail defense O Pacman defense 033341 2004-2016 Apla A Grade It Now Save & Contihue

Explanation / Answer

1)DefensI've strategies.

2)This technique is called poison put.This make it more difficult for the takeover vote by the firm shareholders to be successful.

3)This strategy is greenmail defense.

Thank you.

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