Attempts: Average: 13 3. Level of merger activity and takeovers Ae Aa Mergers, m

Question

Attempts: Average: 13 3. Level of merger activity and takeovers Ae Aa Mergers, merger waves, and the factors that drive these mergers have caused paradigm shifts in the corporate landscape of the United states. Several factors drive these merger waves. Identify which of the following has been a driving factor for mergers: O companies sought potential target companies in different countries to dump their assets at lower values due to changes in leading currencies. O companies sought potential target companies in different countries to benefit from changes in leading global currencies If managers of the target company resist the merger because they feel the price is too low or for other reasons, the acquiring firm's offer is said to be a After the hostile raids of the mid-1960s, Congress passed the williams Act in 1968. Which of the following is true about the Williams Act? O The law allows 20 days to the target company to tender its shares. The law bars the acquiring firm from increasing the offer price during the 20-day open period.

Explanation / Answer

QUESTION 1 - MCQ - Answer is statement 2

Companies sought potential target companies in different countries to benefit from changes inleading global currencies. This helps the acquirer companies to grow globally and have better management of currency exchange rates ups and downs as well.

QUESTION 2 - hostile

In hostile merger, the acquiring company will make a tender offer and will ask the stockholders of the target firm to tender their shares in exchange for the offered price.

QUESTION 3 - Statement 1

Williams Act in 1968, placed 4 restrictions:

- acquirer disclosing their current holdings of target company shares ithin 10 days of amassing more than 5% of company's stock.

- acquirer must disclose the source of fund used in acquisition

- target firm's shareholders must be allowed atleast 20 days to tender their shares

- if acquiring firm increases the offer price during 20-day open period, then all shareholders who tendered prior to new offer must receive the higher price.

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