Question

Which of the following is the best definition of a tender offer?

Question 5 options:

	A merger in which a new firm is created and both the acquired and acquiring firm cease to exist.
	A public offer by one firm to directly buy the shares from another firm.
	Corporate takeover bid communicated to the shareholders by direct mail.
	Corporate takeover bid communicated to the shareholders through a stock exchange.
	The complete absorption of one company by another, where the acquiring firm retains its identity and the acquired firm ceases to exist as a separate entity.

Answer 1

The correct answer is:-

d) Corporate takeover bid communicated to the shareholders through a stock exchange

In a tender offer, one firm offers to purchase some or all shares of another firm through communicating with shareholders.