When the target firm does not solicit the acquiring firm's bid, it is referred to as a(an)
A) stealth raid.
B) adversarial acquisition.
C) hostile takeover.
D) leveraged buyout.

Question

Quizplus · Accepted Answer

A hostile takeover occurs when the target company does not solicit or welcome the acquisition bid from the acquiring company. In contrast, a friendly takeover occurs when the management of the target company is open and cooperative with the acquisition bid. A leveraged buyout (LBO) involves a financial sponsor or private equity firm acquiring a company using a significant amount of debt, while an adversarial acquisition and stealth raid are not commonly used terminology in the mergers and acquisitions field.

When the Target Firm Does Not Solicit the Acquiring Firm's