Series 79 topic

M&A, Tender Offers & Restructuring: 248 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
A public company enters into a merger agreement containing a no-shop clause but also includes a provision allowing the target board to…medium
A company facing a hostile takeover launches a strategy where it announces a bid to acquire the acquirer. What is this defense mechanism…medium
Which of the following best describes a fairness opinion provided by a financial advisor in an M&A transaction?easy
In a management buyout (MBO) of a public company, which board structure is commonly established to evaluate the transaction and protect…medium
A sponsor is evaluating an LBO of a target with $200 million EBITDA and 4x net debt/EBITDA. Senior lenders offer debt up to 5x EBITDA at 6%…hard
A merger agreement provides the buyer the right to match any superior proposal received by the target before accepting a third-party offer.…medium
A poison pill is designed to prevent hostile takeovers primarily by:easy
In a forward triangular merger, which entity survives and assumes the target's assets and liabilities?medium
Which of the following best describes a common method to resolve post-closing disputes relating to the achievement of earnout milestones?medium
Which anti-takeover defense involves the target company selling valuable assets to make itself less attractive to an acquirer?easy
Under SEC rules, when a tender offer is made, which document must the target file to communicate its position and recommendation on the…easy
In an LBO transaction, which of the following typically provides the largest portion of the acquisition financing?easy
When a management buyout (MBO) is proposed, which step is most important in managing potential conflicts between management and independent…hard
If a tender offer is oversubscribed and the bidder cannot purchase all shares tendered, which method must be used to allocate accepted…medium
In a merger agreement, a Material Adverse Change (MAC) clause typically will NOT allow the buyer to terminate the deal due to which of the…medium
In a going-private transaction involving affiliates, which SEC rule requires enhanced disclosure and procedural fairness, including a…hard
A break-up fee in a merger agreement is best described as:easy
In leveraged buyouts, which company attribute is most attractive to lenders evaluating debt capacity?medium
A buyer is acquiring a business through an asset purchase rather than a stock purchase. Which type of liability is most likely to be…hard
In an MBO, which of the following is a common way for management to demonstrate alignment with new equity owners?easy
Which anti-takeover defense involves having only a portion of the board up for election in any given year?easy
According to standard industry practices, which of the following is typically disclosed in a fairness opinion letter?easy
As of 2026, what is the approximate HSR size-of-transaction threshold?medium
A reverse merger is best characterized as a transaction in which:hard
Which is a major advantage of an asset purchase for a buyer compared to a stock purchase?medium
A merger agreement includes a no-shop clause with a fiduciary out and a breakup fee equal to 4% of equity value. The target receives a…hard
An acquisition agreement contains a $3 million indemnity basket and a $15 million indemnity cap. After closing, the buyer discovers…medium
In a reverse triangular merger, which entity survives as a subsidiary post-transaction?medium
A bring-down condition in an acquisition agreement requires that representations and warranties be accurate as of which date(s)?medium
Which party is responsible for filing Schedule 14D-9 in connection with a tender offer?easy
Which of the following would most likely NOT constitute a material adverse change (MAC) under a typical acquisition agreement?medium
A merger consideration includes a floating exchange ratio structure with a collar. If the acquirer's stock price falls below the collar's…hard
What is the consequence if parties to a transaction subject to HSR are found to have 'jumped the gun' by coordinating their businesses…medium
In structuring an LBO, which of the following is a primary source of funds for the purchase price?medium
In an acquisition, which provision limits the time period during which a party can make claims for breach of representations and warranties?easy
Which of the following best describes a staggered board as an anti-takeover defense?easy
A Schedule TO must be amended under which of the following circumstances?medium
Which of the following is a typical metric used to measure performance for an earnout?easy
Which of the following merger structures is often chosen for its ability to accommodate tax-free treatment under Section 368 of the…medium
Which party is required to make a prompt disclosure if it amends or withdraws its recommendation to shareholders during a tender offer?medium
In the context of HSR review, what is a 'second request'?medium
Under the Williams Act, which document must disclose whether the target board recommends acceptance or rejection of a tender offer?medium
A target company amends its shareholder rights plan to lower the triggering threshold from 20% to 10% during a hostile bid. What impact…hard
Which of the following is an example of a white knight defense?medium
Under Rule 14e-1(c) of the Williams Act, how soon after expiration of a successful tender offer must the bidder pay for tendered securities?medium
A private equity firm is evaluating an LBO where the target company has $50 million EBITDA, $400 million debt capacity at 6x leverage, and…hard
Which disclosure is required in a fairness opinion delivered to a target board in a merger?medium
In a merger, which mechanism is commonly used to resolve disputes over earnout achievement post-closing?medium
A merger agreement grants the initial bidder the right to match any superior proposal received by the target. What is this deal protection…medium
Which company characteristic most enhances debt capacity in an LBO structure?medium
Which of the following is most likely to be excluded (carved out) from the definition of a Material Adverse Change (MAC) in an acquisition…easy
In a merger agreement with a fixed exchange ratio and a collar structure, the acquirer agrees to deliver 0.5 shares for each target share…hard
In a Delaware short-form merger where a parent owns 90% or more of a subsidiary, which remedy is available to minority shareholders who…hard
Under SEC tender offer rules, which of the following statements about the subsequent offering period is correct?medium
A bring-down condition in an acquisition agreement typically requires that:medium
When a management buyout (MBO) is proposed, what is the best way for a board to manage potential conflicts of interest?easy
Which of the following is an important limitation that should be disclosed in a fairness opinion?medium
In a transaction with an earnout based on EBITDA milestones over three years, which of the following most directly protects the seller from…hard
A transaction subject to HSR review receives a 'second request' from the FTC. What is the immediate implication for the parties?hard
Under the Williams Act, what is the minimum period a tender offer must remain open for shareholders to tender their shares?medium
A company adopts a poison pill that allows shareholders (other than the acquirer) to purchase additional shares at a steep discount if any…hard
When structuring an earnout, which approach best reduces disputes between buyer and seller over the achievement of milestones?medium
Under Rule 13e-3, which filing is the acquiring affiliate required to make in a going-private transaction?medium
A company that invites a friendly third party to acquire it in response to a hostile bid is using which anti-takeover defense?easy
Upon receiving a tender offer, what is the primary obligation of a public target company’s board under SEC rules?easy
Which of the following is typically true of a contingent value right (CVR) issued in connection with a merger?easy
Which anti-takeover measure increases the cost of a hostile acquisition by requiring a potential acquirer to win multiple annual elections…medium
A company facing a hostile bid adopts a Pac-Man defense. What does this involve?hard
Which of the following is an example of an affiliate transaction that could trigger Rule 13e-3 in a going-private deal?easy
A sponsor structures an LBO using $600 million total purchase price, $150 million equity, and $450 million debt. If the deal is projected…hard
In an entire fairness review under Delaware law, which two elements must be satisfied?hard
Which board process is most consistent with procedural fairness when obtaining a fairness opinion?medium
A floating exchange ratio in a merger agreement is designed to:easy
In an asset purchase, which liability most commonly requires explicit assumption or assignment by the buyer to transfer?hard
A fairness opinion states that, in rendering its opinion, the bank relied upon information provided by the company and did not…hard
In a merger agreement, a floating exchange ratio provision is most beneficial to target shareholders in which scenario?hard
Which form of merger consideration ensures that the target shareholders receive a set dollar amount per share at closing, regardless of the…medium
In a Delaware short-form merger, what remedy is available to a minority shareholder who disagrees with the merger price?easy
In a reverse triangular merger, which entity survives after the transaction?easy
Under the Williams Act, how soon must a Schedule TO be filed after the commencement of a tender offer?medium
In a Rule 13e-3 going-private transaction involving affiliates, which disclosure is specifically required in the disclosure document?medium
Which merger structure is typically used to preserve the target’s contracts and permits while minimizing the acquirer’s exposure to legacy…easy
If parties to a reportable transaction under the HSR Act fail to observe the required waiting period, what is the potential consequence?medium
Which party is responsible for filing the Rule 13e-3 going-private transaction statement when an issuer is taken private by its management?medium
A merger agreement’s Material Adverse Change (MAC) clause contains a “disproportionate effect” carve-out for industry-wide downturns. In a…medium
In a typical LBO, which source of financing is most likely to make up the largest portion of the total capital structure?easy
What is a breakup fee in a merger agreement designed to do?easy
Under Schedule 14D-9, when must a target company’s board respond to a tender offer?medium
Which of the following triggers a material amendment to Schedule TO, requiring prompt disclosure?easy
Which deal protection device most directly limits a target from negotiating with other potential acquirers after signing a merger agreement?medium
In a squeeze-out merger subject to Delaware law, which standard governs the fairness of the transaction to minority shareholders?medium
What does a shareholder rights plan, or poison pill, generally do?easy
When issuing a fairness opinion, which of the following best illustrates a limitation that must be disclosed to the board?medium
Which of the following actions would constitute “gun-jumping” under HSR regulations?medium
A company’s board adopts a staggered board structure during a hostile offer. What is the primary effect?medium
Under the all-holders/best-price rule, which of the following is required in a tender offer?medium
In an asset purchase, what is the main tax advantage for the acquirer compared to a stock purchase?medium
A controlling shareholder in a Delaware corporation executes a short-form merger to acquire the remaining 5% minority interest. Which of…easy
A merger agreement provides for a cash and stock mix, where each target share will be exchanged for $10 in cash plus 0.3 shares of the…easy
Which of the following would most likely NOT be considered a Material Adverse Change (MAC) under a standard acquisition agreement clause?easy
A minority shareholder who dissents from a squeeze-out merger in Delaware and properly perfects appraisal rights is entitled to receive:medium
Which anti-takeover defense involves a target company seeking a friendly third-party acquirer to prevent a hostile takeover?medium
A proposed acquisition valued at $120 million (2019 thresholds) between two companies passes the size-of-transaction test under the HSR…hard
In a triangular merger, who becomes the surviving entity?easy
A merger agreement includes a contingent value right (CVR) as part of the consideration. What is the primary purpose of a CVR?medium
A breakup fee is typically paid by which party in the event a merger agreement is terminated due to the acceptance of a superior proposal?easy
A no-shop clause restricts a target company from soliciting competing bids. Which of the following is NOT typically an exception to a…medium
In a reverse triangular merger, which party typically issues the merger consideration to the target's shareholders?medium
When a tender offer is made, which party is responsible for filing the Schedule 14D-9?easy
Which of the following best describes a 'short-form' merger under Delaware law?medium
In a management buyout (MBO), what is rollover equity?medium
According to the all-holders/best-price rule, if a bidder offers a higher price to certain shareholders during a tender offer, what must…hard
A merger agreement contains a right for the initial acquirer to match any unsolicited superior proposal received by the target. What is…medium
Which of the following events would require an amendment to Schedule TO to be filed 'promptly'?hard
Which of the following is a key tax advantage to the buyer in an asset purchase rather than a stock purchase?medium
Which SEC rule governs disclosures in going-private transactions involving affiliates of a public company?easy
If parties to a reportable transaction under HSR submit their filings but begin integrating operations before the waiting period expires,…hard
In a private company acquisition with an earnout, what is a common source of post-closing dispute between buyer and seller?medium
Which type of merger is often used by a private company to become publicly traded without a traditional IPO?medium
If a target board recommends that shareholders accept a tender offer, where must this recommendation be disclosed?easy
In an asset purchase, which of the following typically requires consent before transfer to the buyer?easy
Under the Williams Act, how soon after a material change in the terms of a tender offer must the offer be extended?easy
The agreement contains a $500,000 deductible basket and a $5 million cap. If a covered $600,000 claim is made, how much is potentially…medium
Under the all-holders/best-price rule, which of the following must an issuer ensure in a tender offer?easy
Which of the following statements about a fairness opinion is correct?easy
A staggered board is best described as an anti-takeover defense in which:easy
In a forward triangular merger, which entity typically acquires the target’s assets and liabilities?medium
A fairness opinion typically contains which of the following disclaimers?medium
Which of the following best describes a working capital true-up in an earnout provision?easy
Which disclosure is required under Rule 13e-3 for a going-private transaction involving affiliates?medium
A merger agreement includes a no-shop clause. What does this restrict the target company from doing?medium
Which of the following best describes the Pac-Man defense?medium
In a Delaware short-form merger where a parent owns at least 90% of a subsidiary, which right is available to minority shareholders?medium
Which scenario is most likely to be excluded by a typical material adverse change (MAC) clause carve-out?medium
As of 2023, what is the minimum size-of-transaction threshold under the Hart-Scott-Rodino Act that generally requires pre-merger…medium
Which of the following is an advantage to the buyer in an asset purchase versus a stock purchase?medium
Which type of merger is most commonly used when the acquirer wants to preserve the target’s contracts that contain anti-assignment clauses?medium
If a person acquires beneficial ownership of more than 5% of a public company’s stock, what filing must be made under the Williams Act?medium
A breakup fee in an M&A agreement is best described as:easy
In the context of asset purchases, what is the primary challenge regarding the assignment of third-party contracts?hard
Which action constitutes 'gun-jumping' under the HSR Act?medium
What is an indemnity basket in the context of acquisition agreements?hard
Under the Williams Act, how soon must payment be made to shareholders after the successful completion of a tender offer?medium
A tender offer for a public company is subject to a minimum offering period. What is the minimum period required under the Williams Act?medium
Which of the following is typically the largest source of funds in a leveraged buyout (LBO) transaction?easy
What is the effect of a subsequent offering period during a tender offer?medium
Under the Williams Act, which of the following is a purpose of the Act?easy
Which merger structure allows an acquirer to secure certain tax advantages under Section 368 of the Internal Revenue Code?medium
In a management buyout (MBO), which of the following best describes the role of a special committee of independent directors?medium
Which of the following is typically the largest source of funds in a leveraged buyout transaction?medium
A 'bring-down' condition related to representations and warranties at closing means which of the following?medium
A public company is considering a going-private transaction involving affiliates. Which disclosure is required under SEC Rule 13e-3?medium
A fixed-value collar provides that the exchange ratio adjusts below the lower bound. If the acquirer's price falls below that bound, what…medium
Which party is responsible for determining if a fairness opinion is needed in a merger?easy
Under the all-holders/best-price rule for tender offers, which of the following must be true?easy
A no-shop clause in a merger agreement typically prohibits the target from doing which of the following?easy
Which of the following best describes a 'go-shop' provision in a merger agreement?medium
A merger agreement offers target shareholders the choice of cash, acquirer stock, or a mix. What risk do target shareholders face if too…medium
In an LBO, if the debt/EBITDA ratio at closing is 7.0x, and the business plan projects EBITDA growth of 10% annually, what is the most…hard
Which of the following best describes a conflict of interest unique to management buyouts?medium
Rule 13e-3 is triggered when which of the following occurs?easy
Which of the following would most likely NOT be carved out from a typical material adverse change (MAC) clause in an acquisition agreement?medium
Which party typically forms a special committee to evaluate a management buyout proposal?easy
A controlling shareholder proposes a going-private transaction. Which additional procedural safeguard is most critical to validate the…hard
A breakup fee in a merger agreement is best described as:easy
In an asset purchase, which of the following is generally transferred to the buyer only with third-party consent?easy
Under the Williams Act, what is the minimum duration a tender offer must remain open to shareholders?medium
In a typical acquisition agreement, a material adverse change (MAC) clause allows the acquirer to terminate the deal if:easy
Which of the following is true about matching rights in a public company merger agreement?medium
In a forward triangular merger, which entity remains as the surviving company?hard
In Delaware, which shareholders are typically eligible to exercise appraisal rights in a short-form (90% ownership) merger?medium
When structuring an earnout in an acquisition agreement, which of the following can help reduce post-closing disputes?medium
In an asset purchase, which of the following is an advantage for the buyer compared to a stock purchase?medium
In an M&A agreement, an indemnity basket is best described as which of the following?easy
A bidder commences a tender offer to acquire 30% of a public company. According to the Williams Act, how long must the offer remain open…medium
In a Delaware short-form merger where a parent owns 90% of a subsidiary, which of the following statements about appraisal rights is…hard
Under the all-holders, best-price rule for tender offers, which of the following is true?easy
Which of the following is typically the largest source of financing in a traditional leveraged buyout (LBO)?easy