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Chapter 11

Example 1

Ravenglass Co is the subject of a takeover bid from Irton Co. An offer of $5
per share has been made to the Ravenglass Co shareholders. Irton Co has
recently taken over several other companies and has gained a reputation as
an asset stripper. The directors of Ravenglass Co don't feel that the takeover
would be in the best interests of the shareholders and other stakeholders of
Ravenglass Co, so they are keen to prevent the takeover from going ahead.

Which THREE of the following strategic defence methods could be used
by the directors of Ravenglass Co in this situation?

A Poison pill

B Super majority

C White knight

D Pacman

E Appeal to the shareholders

Solution

The answer is (C), (D) and (E).

(A) and (B) are defences that would have to be set up before a bid was made.

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