Atlas Consultancies, a financial consulting firm, has received a tender offer for a takeover from a rival firm. In order to retain the goodwill of its management, Atlas gave its employees large bonus packages and other forms of compensation. Which of the following defensive strategies is Atlas using?
A) porcupine provision
B) golden parachute
C) white knight
D) greenmail

Question

Quizplus · Accepted Answer

Atlas is using the golden parachute defensive strategy, which involves providing executives with large severance packages or other financial benefits if the company is taken over. This is intended to incentivize executives to resist the takeover and work towards maintaining the independence of the company. The porcupine provision involves making the company unattractive to the acquirer by adopting measures such as adding debt, while the white knight involves finding a friendly third party to acquire the company instead. Greenmail involves buying back shares from the potential acquirer to prevent a takeover.

Atlas Consultancies, a Financial Consulting Firm, Has Received a Tender