Mergers, Acquisitions, and Corporate Restructurings, 6th Edition

Glossary

Abnormal return In event studies, the part of the return that is not predicted by factors such as the market.

Absolute priority rule The hierarchy whereby claims are satisfied in corporate liquidation.

Acquisition The purchase of an entire company or a controlling interest in a company.

Agency problem The conflict of interest that exists between owners of firms (shareholders) and their agents (management).

Alphabet stock See Tracking stock.

Antigreenmail amendment A corporate charter amendment that prohibits targeted share purchases at a premium from an outside shareholder without the approval of nonparticipating shareholders.

Antitakeover amendment Corporate charter amendment that is intended to make takeovers more difficult and/or expensive for an unwanted bidder.

Any-or-all tender offer A tender offer for an unspecified number of shares in a target company.

Appraisal rights The rights of shareholders to obtain an independent valuation of their shares to determine the appropriate value. Shareholders may pursue these rights in litigation.

Back-end rights plan A type of poison pill antitakeover defense whereby shareholders are issued a rights dividend that is exercisable in the event that a hostile bidder purchases a certain number of shares. Upon the occurrence of that event, shareholders may then exchange their rights combined with their shares for a certain amount of cash and/or other securities equal to a value that is set by the target. In doing so, the target's board, ...