:) CHAPTER 41: MEGERS AND TAKEOVERS

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After the merger, the surviving company possess the following from the company ____________, ____________, __________, ___________, ____________ and becomes liable for all of the acquired corporation's debts and obligations

legal rights, privileges, powers, property, and assets

To induce shareholders to accept the offer, the tender price offered generally is higher than the _______________

market price

After the Consolidation, the newly formed corporation possess the following from the company ____________, ____________, __________, ___________, ____________ and becomes liable for all of the terminated corporation's debts and obligations

same as merger

________________, _________________, _________________ have the same rights and liabilities in a merger, a consolidation, or a share exchange.

shareholders, the corporation, and the corporation's creditors

_____________________ govern the authorization of mergers, consolidations, and share exchanges

state statutes

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statute

An alternative to the purchase of another corporation's assets is the purchase of a _________________________

substantial number of the voting shares of its stock.

After the merger, the __________________ is recognized as a single corporation

surviving corporation

__________________ the remaining, or continuing, corporation following a merger. The corporation that was acquired ___________________.

surviving corporation no longer exists as an entity

Federal securities laws strictly control the ____________, _____________, and __________________ under which most tender offers are made.

terms, duration, and circumstances

If a shareholder disapproves of a merger or a consolidation but is outvoted by the other shareholders, the law will not force a dissenting shareholder to become an ______________________ in a corporation that is new or different from the one in which the shareholder originally invested.

unwilling shareholder

If the target corporation's management opposes the proposed takeover, the target company may try to resist the hostile takeover by employing a __________________

variety of tactics.

_____________________ the right of a dissenting shareholder, if he or she objects to an extraordinary transaction of the corporation (such as a merger or consolidation), to have his or her shares appraised and to be paid the fair value of the shares by the corporation.

Appraisal right

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blank

In contrast, the corporation that is selling all of its assets is substantially changing its business position and perhaps its ability to carry out its corporate purposes. -Must obtain approval from both its board of directors and its shareholders

blank for now

When a corporation acquires all or substantially all of the assets of another corporation by direct purchase, the acquiring corporation simply extends its ownership and control over more assets. -Usually does not need to obtain shareholder approval for the purchase.

blank for now

In a hostile takeover attempt, ____________________ is used by the courts to determine if the board of directors are putting their self-interest ahead of their fiduciary duty to act in the best interests of the company and if they acted reasonably to avoid takeover attempt

business judgment rule

Each state ______________________ for asserting appraisal rights in that jurisdiction. Shareholders may lose their appraisal rights if they do not adhere precisely to the ___________________ prescribed by statute. When they lose the right to an appraisal, dissenting shareholders must go along with the transaction despite their objections.

establishes the procedures procedures

Dissenting shareholders have a statutory right to be paid the _____________________ of the shares they held on the date of the merger or consolidation.

fair value

If the target firm's board of directors views the tender offer as _________________ the board will recommend that the shareholders accept it.

favorable

The newly formed corporation will issue _________________ or pay some _________________ to the shareholders of the disappearing corporations.

issue shares or pay some fair consideration

The surviving corporation will _________________ or _________________ to the shareholders of the corporation that was acquired.

issue shares or pay some fair consideration

____________________ An offer to purchase made by one company directly to the shareholders of another (target) company; often referred to as a "takeover bid."

Tender offer

Appraisal rights normally extend to: -____________________ -____________________ -____________________ -____________________

-Mergers -Consolidations -Share exchanges -Sales of substantially all of the corporate assets

Articles of merger -__________________________ -__________________________

-Sets the terms and conditions of the merge -Filed with the secretary of state

The ____________________ in a corporation makes decisions on ordinary business matters, but for extraordinary matters, normally both the ____________________ and _____________________ must approve the transaction.

-board of directors -board of directors and the shareholders

After a consolidation the newly formed corporation' ____________________ replace the terminated corporation's ____________________.

-newly formed corporation's corporate articles -terminated corporation's corporate articles

An acquiring corporation will be held to have assumed both the assets and the liabilities of the selling corporation: 1.______________________: The purchasing corporation impliedly or expressly assumes the seller's liabilities. 2. _____________________: The sale transaction amounts to a merger or consolidation of the two companies. 3. _____________________: The purchaser continues the seller's business and retains the same shareholders, directors, and officers. 4. ____________________: The sale is entered into fraudulently for the purpose of escaping liability.

1. Express or implicit agreement 2. De facto merger 3. Continuation 4. Fraud exception

Approval of the acquiring corporation's shareholders may be required in the following situations: 1. ________________________ 2. _______________________

1. If the corporation plans to pay for the assets with its stock 2. Shareholder approval is needed if the acquiring corporation's stock is traded on a national stock exchange

Revised Model Business Corporation Act (RMBCA)'s recquirements 1._______________________ 2. _____________________ 3. _____________________ 4. _____________________

1. The board of directors of each corporation involved must approve the merger or share exchange plan. 2. The plan: specify terms and conditions of the merger and determine the value of shares of each merging corporation. 3. The majority of the shareholders of each corporation must vote to approve the plan at a shareholders' meeting. 4. Then Surviving corporation files articles of merger, consolidation, or share exchange with the secretary of state. 5. The surviving corporation receives a certificate of merger from the state or The newly consolidated corporation receives a certificate of consolidation from the state.

________________________ a contractual and statutory process in which two or more corporations join to become a completely new corporation.

Consolidation

_________________ A contractual and statutory process in which one corporation (the surviving corporation) acquires all of the assets and liabilities of another corporation.

Merger

________________ A corporation that owns all of the shares of another corporation (known as its subsidiary).

Parent corporation

The ____________________________ sets forth the following basic requirements for mergers and share exchanges

Revised Model Business Corporation Act (RMBCA)

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Securities and Exchange Commission (SEC) target corporation's management

___________________ A process in which some or all of the shares of one corporation are exchanged for some or all of the shares of another corporation.

Share exchange

_______________________ The corporation to be acquired in a corporate takeover; a corporation to whose shareholders a tender offer is submitted.

Target corporation

____________________________ A merger between a subsidiary corporation and a parent corporation that owns at least 90 percent of the outstanding shares of each class of stock issued by the subsidiary corporation. Don't recquire the approval of the shareholders of either corporation.

Short-Form Merger

__________________ A corporation wholly owned by another corporation (the parent corporation).

Subsidiary corporation

______________________ The acquisition of control over a corporation through the purchase of a substantial number of the voting shares of the corporation.

Takeover

By purchasing a substantial number of the voting shares of the target corporation, the acquiring corporation gains control over the ________________.

Target corporation

Both the ___________________ and the __________________ have guidelines that significantly constrain and often prohibit mergers that could result from a purchase of assets.

U.S. Department of Justice Federal Trade Commission


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