Hostile Takeover Defenses - White Knight or Pac Man

The video discusses two strategies to counter hostile takeovers: the white knight defense and the Pac-Man defense. The white knight defense involves the target company being acquired by a more favorable corporation instead of the hostile acquirer. The Pac-Man defense involves the target company attempting to acquire the hostile acquirer. Both strategies aim to protect the current board of directors, though they may not always align with shareholder interests.

What is the primary goal of the White Knight defense strategy?

• To merge with the hostile acquirer

• To recommend a friendly corporation for acquisition

• To dissolve the company

• To increase the company's debt

In the White Knight defense, what role does the board of directors play?

• They resign from their positions

• They initiate a hostile takeover

• They recommend a friendly corporation for acquisition

• They sell off company assets

What is the Pac-Man defense strategy?

• A strategy to merge with the hostile acquirer

• A strategy to dissolve the company

• A strategy to increase company debt

• A strategy where the target company attempts to acquire the hostile acquirer

How does the Pac-Man defense affect the board of directors?

• It has no impact on them

• It forces them to resign

• It protects their positions

• It guarantees their removal

What potential legal issue can arise from the Pac-Man defense?

• Dissolution of the company

• Hostile takeover by another company

• Shareholder director derivative litigation

• Increased company debt