Exam 38: Corporate Acquisitions and Multinational Corporations

Shareholders are not allowed to make individual decisions whether to sell their shares to the tender offeror.

The term greenmail refers to the agreement of the tender offeror to abandon its tender offer and not purchase any additional stock.

The Securities and Exchange Commission has no authority to regulate the solicitations of proxies.

Which of the following best describes a proxy contest?

Federal law requires that the target company be notified of a tender offer before the offer is made.

If the management of a company desires to sell most of the assets of the business outside the regular course of business,the board of directors must recommend this action and the shareholders must vote to approve it.

In a short-form merger,which approvals are needed?

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

When proxies are solicited,each issue must be able to be voted on separately.

The Williams Act provides that if fraud is committed,both civil and criminal charges may be brought.

Expansive Corporation made a tender offer of $65 per share to the shareholders of Hometown Corporation to acquire 75 percent,but no more than that,of the shares of Hometown.Because only 68 percent of the shares had been tendered in 30 days,Expansive offered $75 per share,and another 20 percent of the shares were tendered in 4 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.

In order to exercise the appraisal right where a shareholder is opposed to a merger,the shareholder must:

In an ordinary merger,if the number of voting shares increases by 20 percent or less,this eliminates which needed approvals when compared to ordinary mergers where the number of shares increases by more than 20 percent?

Shareholders desiring to communicate with other shareholders through mass mailing must file the communication with the SEC only if the shareholder is seeking a proxy as part of the communication.

If management desires to solicit proxies from shareholders,it must:

The fair price rule in the Williams Act requires that tender offers be made for a fair price.

Bob has decided to solicit proxies from shareholders of Sunset Corporation.Bob owns two shares of Sunset,which have a share price of $48.Bob is soliciting the proxies in order to elect a friend of his to the board of directors.Bob's friend is reasonably intelligent but has no business experience.In his proxy solicitation,Bob accurately describes his friend and his background and indicates that the proxy is being sought in order to elect this friend to the board of directors.Bob does not disclose why he thinks his friend should be on the board of directors.Nor does Bob disclose what effect he thinks his friend being on the board will have on the earnings of the company.Two weeks before starting to solicit proxies,Bob filed copies of his proxy materials with the Securities and Exchange Commission.Bob:

Marvin owns several thousand shares of Elm Street Corporation.Hickory Street Corporation has proposed a merger with Elm Street where Hickory Street will be the surviving corporation.Hickory Street is proposing to give each current Elm Street shareholder some Hickory Street stock and some cash for each share of Elm Street.Marvin is opposed to some of the corporate policies of Hickory Street and does not want to own any of its stock.What is Marvin's best course of action in this situation?