Mergers

Question 1

Statutory Merger

Answer 1

Terms of the merger are going to be set out in the disclosure info that is given to shareholders. Both boards & both shareholders. Appraisal right.

Question 2

Appraisal Right

Answer 2

If any shareholder votes against the merger, they have an appraisal right. Company has to value the shares in the company they are in, and pay them out on the fair value price of their shares. (makes it more costly to take over)

Question 3

Short Form Merger

Answer 3

If you own 90% of company, you can require them to sell you the last 10%. No appraisal right.

Question 4

Practical Merger

Answer 4

Takeover company buys shares from shareholders of the target company directly. The board of the takeover company uses a tender offer to take over the business. Bypasses board and goes right to shareholders.

Question 5

Purchase of Assets

Answer 5

Board of takeover company purchases assets from the board of the target company (may require a shareholder vote as well).