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Series 79: M&A, Tender Offers & Restructuring
Series 79 practice questionmediumSqueeze-Out Mergers and Appraisal Rights

Which of the following best describes a 'short-form' merger under Delaware law?

  1. AA merger requiring shareholder approval regardless of ownership percentage
  2. BA merger available to companies with at least a 75% ownership of the target
  3. CA merger that grants automatic appraisal rights to all shareholders
  4. DA merger executed by a parent holding at least 90% of a subsidiary’s shares without a shareholder vote✓ Correct answer
Explanation

Why DA merger executed by a parent holding at least 90% of a subsidiary’s shares without a shareholder vote

Under Delaware law, a parent owning at least 90% can complete a short-form merger without a shareholder vote, but dissenting shareholders may have appraisal rights. Confusing the threshold or requirements could mislead about minority protections.

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