Series 79 practice questionhardAnti-Takeover Defenses
A target company amends its shareholder rights plan to lower the triggering threshold from 20% to 10% during a hostile bid. What impact does this have?
- AIt makes a friendly acquisition easier
- BIt forces the bidder to terminate its offer
- CLowers the poison-pill trigger✓ Correct answer
- DIt nullifies all anti-takeover protections
Explanation
Why C — Lowers the poison-pill trigger
Lowering the threshold of a poison pill increases the likelihood of triggering it, deterring accumulations of a large stake. The trap is to assume it would aid takeovers or eliminate defenses.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 995+ Series 79 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related M&A, Tender Offers & Restructuring questions
- Which of the following is an example of a white knight defense?
- Under the Williams Act, which document must disclose whether the target board recommends acceptance or rejection of a…
- Under Rule 14e-1(c) of the Williams Act, how soon after expiration of a successful tender offer must the bidder pay for…
- In the context of HSR review, what is a 'second request'?
- A private equity firm is evaluating an LBO where the target company has $50 million EBITDA, $400 million debt capacity…
- Which party is required to make a prompt disclosure if it amends or withdraws its recommendation to shareholders during…
- Which disclosure is required in a fairness opinion delivered to a target board in a merger?
- Which of the following merger structures is often chosen for its ability to accommodate tax-free treatment under…