In a proxy fight, an outsider seeking to take over a company directly

QUESTION

In a proxy fight, an outsider seeking to take over a company directly contacts the company’s shareholders and offers to buy their stock at a price that exceeds the present market value.

Indicate whether the statement is true or false.

ANSWER

Answer: FALSE
Explanation: An outsider attempting to buy such stock is making a tender offer; in a proxy fight, the outsider contacts shareholders and urges them to vote for the raider’s handpicked candidates for the board of directors.