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CS Executive · Capital Market and Securities Laws · Acquisition of Shares and Takeovers - Concepts

A target company's board, after receiving a hostile open offer, makes a counter-offer to buy shares of the acquirer itself so as to turn the tables. This defence is called:

This is the Pac-Man defence, in which the target turns on the hostile bidder and makes a counter-offer to buy the acquirer's shares. Golden handshakes, leveraged buyouts and standstill agreements are different concepts and do not involve the target bidding for the acquirer.

  1. APac-Man defenceCorrect
  2. BGolden handshake
  3. CLeveraged buyout
  4. DStandstill agreement

Explanation

In a Pac-Man defence the target attempts to acquire the hostile bidder. A golden handshake is a payout to departing executives. A leveraged buyout is an acquisition financed largely with debt. A standstill agreement is an agreement by the acquirer to limit its holding for a period.

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