Ch 3 Deck 10

Question 1

SEC Rule 13e prevents the target company from stopping a takeover by

Answer 1

buying back its own stock

Question 2

Under Rule 13e-4, the SEC requires tender offers to be open for

Answer 2

a minimum of 20 days.

Question 3

A Dutch auction is typically used when

Answer 3

pricing initial public offerings and government securities

Question 4

In a Dutch auction, the bidding process starts with

Answer 4

the issuer obtaining bids for the IPO from interested investors and allocating shares in the IPO based on those bids

Question 5

In a Dutch auction, initial share allocation is usually determined by

Answer 5

allocating shares to the highest bidder first, then the issuer will continue allocating to lower bids until the entire allotment is sold

Question 6

In a Dutch auction Often, the the price which all bidders will pay is

Answer 6

the lowest bid at which the issuance is filled

Question 7

In a modified Dutch Auction shareholders place bids for

Answer 7

the number of shares they would like to tender and the price they are willing to accept within a given price range

Question 8

In a modified Dutch Auction after the shareholders have named price they are willing to accept, the corporation

Answer 8

starts accepting bids from the lowest on up until all shares are sold.

Question 9

In a pure Dutch Auction the varying bids

Answer 9

would be paid

Question 10

In a modified Dutch Auction, the highest bid that was accepted is

Answer 10

offered to all shareholders with accepted bids

Question 11

Rule 13e-3 covers the forms required if an insider is

Answer 11

taking a company private

Question 12

If an insider is taking a company private form

Answer 12

13e-3 is filed with the SEC.

Question 13

Under Rule 13e-3 the SEC requires companies to provide

Answer 13

information to shareholders about the transaction that caused the company to go private

Question 14

Under Rule 13e-3 the SEC may require a company being taken private to

Answer 14

file a merger proxy statement

Question 15

Under SEC Rule 14(d) In a tender offer, a bidder can change

Answer 15

an offer once the initial offer has been made

Question 16

Under SEC Rule 14(d) If a bidder increases the price offered in a tender offer, the bidder must

Answer 16

pay the increased amount to all those who have already tendered their shares

Question 17

Under SEC Rule 14(d) A bidder is restricted from purchasing shares of the target corporation

Answer 17

outside of the tender offer

Question 18

Once an initial offer has occurred, rival offers can occur, and Target shareholders are allowed

Answer 18

at least 10 additional days to consider the new offer

Question 19

Rule 14d-1 covers to which tender offers

Answer 19

Regulations 14D and 14E apply.

Question 20

Rule 14d-9 provides, both pre- and post-commencement of a tender offer, a means to avoid having communication count as

Answer 20

solicitation or recommendation

Question 21

Rule 14d-9 communications in tender offers requires that the person

Answer 21

• file the communication with the SEC

- other procedures

Question 22

Rule 14d-9 communication in tender offers “other procedures” depend on

Answer 22

• person’s relation to subject company

- whether tender offer has commenced

Question 23

Rule 14d-9 communication in tender offers does not apply to

Answer 23

“stop-look-listen communication”

Question 24

communication from a company to its security holders informing them of the tender offer and asking them to wait

Answer 24

“Stop-look-listen communication”

Question 25

in stop-look listen communication the company asks security holders to wait on their decision to accept the offer until

Answer 25

the company has given its offer

Question 26

in stop-look listen communication the company must give its opinion within

Answer 26

10 days