In defending against a hostile takeover, the strategy that involves the target firm finding a more suitable acquirer and prompting it to compete with the initial hostile acquirer to take over the firm is called the__________ strategy.
A) greenmail
B) white knight
C) golden parachute
D) poison pill

Question

Quizplus · Accepted Answer

The strategy described is known as the "white knight" strategy, where the target firm seeks out a more favorable acquirer to compete with the hostile acquirer. Greenmail involves buying back a significant amount of the company's own shares at a premium to discourage the hostile acquirer, golden parachute offers executives large compensation packages in the event of a takeover, and poison pill involves implementing measures to make the target firm less attractive to the hostile acquirer.

In Defending Against a Hostile Takeover, the Strategy That Involves