Answer (C) is correct . A poison pill may be included in a target corporation’s charter, by-laws, or contracts to reduce its value to potential tender offerors. A poison pill may be, for example, a right granted to the target firm’s shareholders to purchase shares of the merged firm resulting from a takeover. The bidding company loses money on its shares because this right dilutes the value of its stock.
Answer (A) is incorrect because Greenmail involves offering the potential acquiror the opportunity to sell his/her already acquired shares back to the corporation above the market value.
Answer (B) is incorrect because Flip-over rights provide for the target shareholders to acquire in exchange for their stock a relatively greater interest in an acquiring entity.
Answer (D) is incorrect because A?crown jewel transfer occurs when the target corporation sells or disposes of one or more assets that made it a desirable target.
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