Fact Pattern 31-7 Enchilada Inc. seeks to purchase a substantial number of the voting shares of Fajita Inc .
Refer to Fact Pattern 31-7. Enchilada deals directly with the shareholders of Fajita. Enchilada offers a price higher than the market price of Fajita's shares. This is
A) a poison pill.
B) a tender offer.
C) a self-tender.
D) a breach of the business judgment rule.

Question

Quizplus · Accepted Answer

A tender offer is when a company offers to buy shares from shareholders at a premium over the market price, often to gain control of the company.