Series 79 practice questionhardAnti-Takeover Defenses
A company facing a hostile bid adopts a Pac-Man defense. What does this involve?
- AThe target launches a counter-offer to acquire the hostile bidder✓ Correct answer
- BThe target spins off a major business unit to deter the bidder
- CThe target repurchases its own shares in the open market
- DThe target solicits offers from multiple third parties
Explanation
Why A — The target launches a counter-offer to acquire the hostile bidder
A Pac-Man defense is when the target attempts to acquire the hostile bidder. The trap is confusing this with divestitures, buybacks, or white knight maneuvers.
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