Asked by Marina Carosella on Jun 11, 2024
Verified
When Reese Group of Hotels (RGH) was on the verge of facing a hostile takeover bid by rivals Blossoms Group (which held a 14.12 percent stake in RGH) ,Rely's came forward and bought a 14.98 percent stake in RGH,thereby relieving RGH from the hostile takeover risk.This kind of tender offer defense is called:
A) greenmail.
B) the lock-up option.
C) white knight.
D) Pac-Man.
White Knight
A person or company making a favorable investment in or purchase of a company as a strategic defense against a hostile takeover.
Tender Offer
A public, open offer or invitation by a prospective acquirer to all shareholders of a publicly traded corporation to tender their stock for sale at a specific price during a certain time.
Hostile Takeover
An acquisition attempt by one company of another that is resisted by the target company's management and board of directors.
- Understand the diverse protective measures and tactics utilized by companies to counteract hostile takeover attempts.
Verified Answer
AC
Aqila CamalyaJun 16, 2024
Final Answer :
C
Explanation :
A white knight rescues the corporation from the black knight by offering more money for the corporation's shares.In this case,RGH saved itself from a hostile takeover bid by Blossoms when Rely's (the white knight)purchased a large stake in RGH.
Learning Objectives
- Understand the diverse protective measures and tactics utilized by companies to counteract hostile takeover attempts.