Hostile takeovers often end up in court when management attempts to block such a maneuver and raiders accuse management of selfishly sacrificing the stockholders’ interests. The courts often look askance at “coercive” offers by raidersâ€”an offer to buy, say, 20 percent of the company’s stock by a certain date from the first stockholders who offer to sell. By contrast, they take a more favorable attitude toward “noncoercive” offers to buy any and all stock supplied at announced prices. Do you think the courts are right to reject “coercive offers” and prevent management from blocking “noncoercive” offers? Why?
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