A corporate raider is urging shareholders to vote for his choice of pe

QUESTION

A corporate raider is urging shareholders to vote for his choice of persons to fill the board of directors seats. What is happening?

A) a proxy fight
B) a tender offer
C) a leveraged buyout
D) an employee buyout
E) a poison pill scenario

ANSWER

Answer: A
Explanation: A) A proxy fight happens when an outsider contacts shareholders and urges them to vote for the raider’s handpicked candidates for the board of directors. If the raider’s directors are voted in (and they are in the majority), they can then force out the company’s existing top management.