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LOS f: Distinguish and describe pre-offer and post-offer takeover defense mechanisms.
Q1. A takeover defense that allows the firm’s existing shareholders to purchase additional shares of the company’s stock at attractive prices is a:
A) pre-offer defense and is called a poison pill.
B) post-offer defense and is called greenmail.
C) pre-offer defense and is called a poison put.
Q2. Which of the following takeover defenses are considered pre-offer defenses?
A) Fair price amendments, poison puts and staggered boards.
B) Liability restructuring, poison pills and supermajority voting provisions.
C) Poison pills, staggered boards and litigation.
Q3. Toulouse Tempered Steel Industries (TTS) is weighing its strategic options following a wave of mergers in the industry across Europe and worldwide. Pascal LaPage, managing director of TTS is wondering whether it makes sense for the firm to position itself as a standalone entity, or if the firm should be pursuing a merger/acquisition of another firm that would provide a good strategic fit. Lyon Bank has been the firm’s primary lender for many years, and Alaine Clamon, CFA, from Lyon’s corporate finance department is due to meet with LaPage and other members of the firm’s finance group to discuss some strategic options.
Clamon begins his presentation with the underlying rationale for even considering a merger or acquisition as a strategic alternative. Some reasons cited by Clamon that can be used to justify a merger are the pursuit of economies of scale, the elimination of operating inefficiencies, and diversification of the firm’s assets. In general, the underlying rationale helps to determine what type of merger the firm will be undertaking. LaPage asks his staff to keep these in mind as they seek suitable candidates for evaluation.
A member of the staff asks Clamon about types of takeover defenses that might by employed by either Aragon or Brittany. Clamon replies that these fall broadly into two categories, pre-offer and post-offer defenses. As examples of pre-offer defenses he describes staggered boards and supermajority voting provisions. As an example of post-offer defenses he describes the crown jewel defense. He notes that, obviously, TTS must take care to account for the ramifications of the presence of any takeover defenses.
Which of the following is not a traditional type of merger between two firms?
A) Syndicate.
B) Conglomerate.
C) Horizontal.
Q4. With regard to the list of sensible motives for undertaking a merger cited by Clamon, he is:
A) correct with regard to operating inefficiencies, and correct with regard to diversification.
B) correct with regard to operating inefficiencies, but incorrect with regard to diversification.
C) incorrect with regard to operating inefficiencies, but correct with regard to diversification.
Q5. With respect to the takeover defenses described by Clamon, he is:
A) correct with regard to the pre-offer defenses listed, but incorrect with regard to the post-offer defense listed.
B) incorrect with regard to the pre-offer defenses listed, but correct with regard to the post-offer defense listed.
C) correct with regard to the pre-offer defenses listed, and correct with regard to the post-offer defense listed.
Q6. The difference between a white knight defense and a white squire defense is that the white knight:
A) is a post-offer defense, whereas the white squire is pre-offer.
B) takes a minority interest, whereas a white squire takes over the entire firm.
C) takes over the entire firm, whereas a white squire only takes a minority interest. | 
发表于 2009-3-3 15:57
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