When an acquiring firm bypasses current management and makes a direct offer to purchase shares from the shareholders, this action is termed a:
A)Leveraged buy-out
B)Hostile takeover
C)Tender offer
D)Corporate buy-out

Question

Quizplus · Accepted Answer

When an acquiring firm bypasses current management and makes a direct offer to purchase shares from the shareholders, this action is termed a tender offer. A hostile takeover, on the other hand, involves directly approaching the shareholders with an offer to buy the company without the consent or cooperation of current management. A leveraged buy-out (LBO) involves using borrowed funds to acquire a company, usually with the intention of taking it private. A corporate buy-out is a generic term that can refer to any type of acquisition or merger between two companies.

When an Acquiring Firm Bypasses Current Management and Makes a Direct