Series 79 topic

M&A, Tender Offers & Restructuring: 91 free Series 79 practice questions

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A merger between two companies in the same industry that are direct competitors is classified as which type of merger?easy
When a manufacturer acquires one of its primary raw material suppliers, this transaction is best described as a:easy
A large consumer products company acquires a technology firm that develops artificial intelligence software. These companies have no supply…medium
In a reverse triangular merger, which entity survives the transaction?medium
An investment banker is advising on a deal where the acquirer wants to preserve the target's existing contracts and government permits,…hard
In an asset purchase, which of the following is generally true regarding the target company's liabilities?easy
A private equity firm is considering acquiring a manufacturing company that has significant environmental liabilities from legacy…medium
Which of the following is a tax advantage of an asset purchase from the buyer's perspective?medium
A target company holds a critical FDA license that is non-transferable. The acquirer wants to ensure continuity of operations. Which…hard
When an acquirer offers its own shares to target shareholders in exchange for their shares, this is known as:easy
Company A is acquiring Company B for $50 per share using a fixed exchange ratio of 2.5 shares of Company A for each share of Company B. If…medium
Which of the following is a primary reason an acquirer might prefer to use stock rather than cash as merger consideration?medium
An acquirer offers mixed consideration of $30 cash and 0.5 shares of acquirer stock per target share. The acquirer's stock trades at $40.…hard
The Williams Act primarily regulates which type of transaction?easy
Under Section 13(d) of the Securities Exchange Act, any person who acquires beneficial ownership of more than what percentage of a class of…easy
An activist hedge fund has been quietly purchasing shares of a public company and now holds 4.9% of the outstanding common stock. The fund…medium
Under the Williams Act, a tender offer must remain open for a minimum of:medium
A bidder commences a tender offer at $45 per share for all outstanding shares of TargetCo. After 15 business days, the bidder increases the…hard
A Schedule TO is filed by which party in a tender offer?easy
The board of directors of a target company has received an unsolicited tender offer. Within how many business days must the target file a…medium
Which of the following statements about Schedule 14D-9 is correct?medium
During a hostile tender offer, the target company's board issues a Schedule 14D-9 recommending that shareholders reject the offer. A week…hard
The Hart-Scott-Rodino (HSR) Act requires parties to large mergers and acquisitions to notify which federal agency before completing the…easy
After an HSR filing is made, what is the initial waiting period before the parties may consummate the transaction?medium
During the HSR review process, the FTC issues a 'second request' to the merging parties. What does this mean?medium
Two companies plan to merge in a transaction valued at $500 million. During HSR review, the DOJ determines the merger would substantially…hard
A fairness opinion in the context of an M&A transaction is typically provided by:easy
Which of the following valuation methodologies would most likely be used in preparing a fairness opinion?medium
A financial advisor provides a fairness opinion stating that the $35 per share offer is 'fair, from a financial point of view' to the…medium
An investment bank serving as both financial advisor and provider of a fairness opinion in a merger stands to receive a significant success…hard
A 'no-shop' clause in a merger agreement prohibits the target company from:easy
A 'go-shop' provision in a merger agreement allows the target company to:medium
TargetCo has signed a merger agreement with BuyerCo that includes a break-up fee of 3% of equity value. Under what circumstance would…medium
A merger agreement includes a reverse break-up fee of $500 million payable by the acquirer. In which scenario would this fee most likely be…hard
A 'matching right' provision in a merger agreement gives the original acquirer:medium
An investment banker is advising a target board on evaluating whether a break-up fee of 5.5% of equity value is appropriate. Which of the…hard
A 'poison pill' (shareholder rights plan) is designed to:easy
A company with a staggered (classified) board of directors typically divides its board into three classes with staggered three-year terms.…medium
In a 'white knight' defense, the target company:medium
Company A launches a hostile tender offer for Company B. In response, Company B's board makes a counter-tender offer to acquire Company A's…hard
A 'crown jewel' defense involves the target company:medium
Under the Unocal standard established by the Delaware Supreme Court, a board's defensive measures in response to a hostile takeover are…hard
In a leveraged buyout (LBO), the acquisition is primarily financed with:easy
A private equity firm is evaluating a potential LBO target. Which of the following characteristics would make a company MOST attractive as…medium
In an LBO capital structure, which layer of financing has the highest priority of repayment in the event of default?medium
A PE firm acquires a company for $1 billion using $300 million of equity and $700 million of debt. After five years, the debt has been paid…hard
Which of the following is a key risk associated with the high leverage used in LBO transactions?hard
A management buyout (MBO) is a transaction in which:easy
The board of a public company is evaluating an MBO proposal from its CEO backed by a PE firm. What is the primary governance concern?medium
In an MBO of a public company, the board forms a special committee of independent directors. The special committee should do all of the…hard
SEC Rule 13e-3 applies to which type of transaction?easy
In a going-private transaction subject to Rule 13e-3, the filing party must include in its Schedule 13E-3:medium
A controlling shareholder holding 70% of a public company proposes to acquire the remaining 30% at a premium to the current market price.…medium
Under the MFW framework established by the Delaware Supreme Court, a controlling shareholder going-private transaction will receive…hard
Appraisal rights allow dissenting shareholders in a merger to:easy
Under Delaware General Corporation Law Section 253, a parent corporation that owns at least what percentage of a subsidiary's outstanding…medium
In a two-step acquisition, a hostile bidder first conducts a tender offer and then completes a back-end merger to squeeze out remaining…medium
A shareholder wishes to exercise appraisal rights in a merger under Delaware law. Which of the following steps is required to properly…hard
An earnout provision in an acquisition agreement provides for:easy
A buyer acquires a biotechnology company for $200 million upfront plus an earnout of up to $100 million contingent on FDA approval of the…medium
An investment banker is structuring an earnout for the acquisition of a software company. The seller insists on revenue-based earnout…hard
In an acquisition agreement, representations and warranties primarily serve to:easy
An indemnification provision in an acquisition agreement that includes a 'basket' and a 'cap' functions to:medium
In recent years, representation and warranty insurance (RWI) has become increasingly common in M&A transactions. Which of the following…hard
A material adverse change (MAC) clause in an acquisition agreement is typically used as:medium
In the landmark Delaware Chancery Court case Akorn v. Fresenius (2018), the court found that a MAC had occurred. Which of the following…hard
Which of the following events would most commonly be carved out from the definition of a material adverse change in a typical acquisition…medium
The 'all-holders' rule under SEC tender offer regulations requires that:medium
The 'best-price' rule in the context of tender offers requires that:medium
A bidder commences a partial tender offer for 51% of a target company's outstanding shares. More than 51% of the shares are tendered. Under…hard
Which transaction structure results in the target surviving as a separate legal subsidiary of the buyer?easy
What most clearly distinguishes a hostile takeover from a friendly acquisition?easy
Under the Williams Act, how long must a tender offer generally remain open?easy
If a bidder materially increases or decreases the percentage of securities sought or the consideration offered in a tender offer, what is a…medium
What is the objective of a proxy contest?medium
What is a fairness opinion intended to address?medium
Schedule 13E-3 is associated primarily with which type of transaction?medium
In an LBO model, why is debt paydown capacity so important?medium
What is the defining feature of a leveraged buyout?medium
Why might a seller accept stock consideration instead of all cash?medium
What does a shareholder rights plan, or poison pill, generally do?hard
Why do parties file under the Hart-Scott-Rodino Act?hard
What is the practical effect of the HSR waiting period after a required filing is made?easy
What is the central purpose of the Williams Act?easy
What do appraisal rights generally allow a dissenting shareholder to do?easy
Why is integration planning started before closing in many transactions?easy
In a spin-off, what do the parent company’s shareholders generally receive?easy
What issue commonly becomes more important in a cross-border acquisition than in a domestic deal?easy
What is a de-SPAC transaction?easy
An acquisition is accretive when it does what?easy
Why can a stock-for-stock acquisition be dilutive even when the target is growing quickly?easy