Exam 29: Corporate Acquisitions and Multinational Corporations

A "poison pill" refers to a target company in a hostile takeover selling off valuable pieces of itself to make itself less attractive to the potential buyer.

Expansive Corporation made a tender offer of $65 per share to the shareholders of Hometown Corporation to acquire seventy-five percent,but no more than that,of the shares of Hometown.Because only sixty-eight percent of the shares had been tendered in twenty days,Expansive offered $75 per share,and another twenty percent of the shares were tendered in four days.Expansive terminated the higher offer on the fifth day,paid $65 for all the shares tendered at that price,and paid $75 for some of the shares tendered at the higher price.Discuss Expansive's actions.

To make a tender offer,the tender offeror's board of directors must approve the offer.

Which of the following is true regarding a corporation that conducts business in a foreign country using a branch office?

A corporation is not liable for torts committed by personnel of a branch office.

A "silver parachute" references large severance payments received by top executives when they leave their employment at a corporation.

Many state antitakeover statutes cover corporations that have their principal office in the state,have a certain percentage of its shareholders who are residents of the state,or have residents of the state who own a certain percentage of the corporation's stock.

A shareholder's proxy can be granted to:

The Smith Act specifically regulates all tender offers,whether they are made with securities,cash,or other consideration,and it establishes certain disclosure requirements and antifraud provisions.

In a merger,the shareholders of the merged corporation receive stock or securities of the surviving corporation,or other consideration as provided in the plan of merger.

The purpose of a proxy is to:

In a short-form merger,neither the approval of the shareholders of either corporation nor the approval of the board of directors of the subsidiary corporation is needed.

In 1968,the United States Congress enacted the ________ Act as an amendment to the ________.This act specifically regulates all tender offers,whether they are made with Securities,cash,or other combinations,and it establishes certain disclosure requirements and antifraud provisions.

If the parent corporation owns 51 percent or more of the outstanding shares of the subsidiary corporation,a short-form merger procedure may be followed to merge the two corporations.

According to the Williams Act,the "fair price" rule stipulates that tendered shares must be purchased on a pro rata basis if too many shares are tendered.

Multinational corporations are also called ________ -national corporations.

After a share exchange,one corporation (the principal corporation)owns all the shares of the other corporation (the agent corporation).

In a merger,a dissenting shareholder may elect to receive the fair value of his or her shares instead of being part of the restructuring.What is this right called?

Some antitakeover statutes have been challenged as being unconstitutional for allegedly violating the Fifth Amendment to the United States Constitution.

A parent corporation is not liable for contracts or torts committed by a foreign subsidiary,other than its capital contribution to the subsidiary.