Lecture 13

Question 1

Definition of a Toelhold bidding?

Answer 1

The bidder acquires shares in the target before making an offer. This can lead to a bidding advantage versus competitors

Question 2

Definition of Bear hug?

Answer 2

The bidder approaches the target management in friendly negotiations but threatens to launch a hostile bid if negotiations break down

Question 3

Definition of Proxy Fight?

Answer 3

A toehold owner attempts to use his voting rights to garner support from other shareholders to oust opposing target management

Question 4

Termination fees and Stock Lockus?

Answer 4

The bidder is awarded a fee or stock in the target in case the bid is rejected. This can only be granted by target management

Question 5

Definition of White Knight?

Answer 5

Friendly potential acquiror sought by a target company threatened by an unwelcome suitor.

Question 6

Definition of Shark Repellent?

Answer 6

Amendments to a company charter made to forestall takeover attempts

Question 7

Definition of Poison Pill

Answer 7

Measure taken by a target firm to avoid acquisition; for example, the right for existing shareholders to buy additional shares at an attractive price if a bidder acquires a large holding