Exam 29: Corporate Acquisitions and Multinational Corporations

Tandem Corporation is the target of a hostile takeover by Alpha Corporation.Management of Tandem fears for their jobs because of statements made by Alpha's management about the need to streamline the Tandem management.Tandem works out a deal with Beta Corporation for the two corporations to merge,with Beta surviving.Beta has indicated that it will leave present management intact.Two years after the merger with Beta,an independent consultant reports that there are too many levels of management in the combined corporation,and that thirty percent of management positions should be eliminated.In this circumstance:

The Williams Act does not regulate the length of time that a tender offer must remain open.

One corporation can acquire all the shares of another corporation through a share default.

In a merger,the corporation which ceases to exist is called the dissolved corporation.

If a dissenting shareholder who has exercised his or her appraisal right is dissatisfied with the corporation's determination of the fair market value of the shares,then:

A shareholder exercising his or her appraisal right can have the corporation petition the court to determine the value of shares,if the shareholder believes that the corporation has set the value too low.

In a merger,the corporation that continues to exist is called the merged corporation.

Solicitation of proxies is regulated under the:

A corporate sale or lease of its assets requires the recommendation of the board of directors and an affirmative vote of the majority of the shares of the selling or leasing corporation that are entitled to vote (unless greater vote is required).

According to the Williams Act,the tender offer must be extended for ten (10)business days if the tender offeror increases the number of shares it will take or the price it will pay for the shares.

Even if management is not in favor of a shareholder resolution,a shareholder has a right to have the resolution included in the corporation's proxy materials if it:

The Delaware antitakeover statute provides that an acquirer of a Delaware corporation cannot complete a merger with the acquired corporation for one (1)year after purchasing fifteen (15)percent or more of the Delaware corporation's shares.

The board of directors has a fiduciary duty to shareholders in taking action relative to a hostile takeover.

A corporation must notify shareholders of the existence of their appraisal rights before a transaction can be voted on.

A short-form merger is a simplified form of merger that can be used so long as the number of voting shares outstanding of the surviving corporation increases by less than twenty percent.

In evaluating whether management's actions are appropriate in response to a hostile tender offer,the primary concern is usually that management might have improperly:

Go-Fer-It Corporation has made a tender offer to acquire eighty percent of the shares of Beekin Corporation at $58 per share.Because only sixty-eight percent of Beekin's shares have been tendered,the board of directors of Go-Fer-It wants to raise its offer price to $65 per share.If Go-Fer-It raises the offer price to $65,it must:

Explain what a "poison pill" is,and how it affects business dealings.

In fighting a hostile takeover,a "Pac-Man" tender offer refers to:

One corporation can acquire all the shares of another corporation through a share ________.In this arrangement,both corporations retain their separate legal existence,with the parent corporation owning all the shares of the subsidiary corporation.