The Case Studies

[Date of Submission]

Table of Contents

Introduction3

Discussion3

Scenario I3

Hostile Takeover3

Legally Adoption of Defensive Measures4

Types of Mergers4

Scenario II5

Specific Facts and Circumstances5

Maxxo Brothers and Challenge to Poison Pill5

Decision as an AggroVate's Board of Directors5

Simulation6

Agree or Disagree with Judge's Decision6

Analysis of Situation in case of being the Juror6

Conclusion7

The Case Studies

Introduction

The case study highlights about a company named AgroVate which is a Delaware corporation and currently had been bided by Bijoux to take over. The AgroVate is a joint venture and family business owned by Sleepy, Dopey and Happy who are brothers in relation (Farren & Gibb, 2007). The president of Bijoux personally sees AgroVate as a business opportunity, but due to some conditions, AgroVate is looking more forward towards Stopper Inc, which is an old business rival of Bijoux. A corporate counsel is approached by AgroVate in order to make an appropriate decision and four responses are outlined towards the proposal offered by the Bijoux.

Discussion

Scenario I

Hostile Takeover

Yes, it is a hostile takeover, as through a tender offer it involves of acquisition of a target company by the acquirer company regardless of having agreeable terms with the target company's management. Since, we already know that Bijoux announced a target bid for AgroVate and above the market price offered a tender to shareholders, whereas, Bijoux also aims to sell the AgroVate's current widget finishing business along with the replacement of current board.

The deal does not want to get through by the target company's management that is one of the key characteristic of a hostile takeover and sometimes use of controversial strategies like, Pac-man defense, crown-jewel defense, the poison pill, golden parachute and others are adopted by the target company's management in order to defend itself from the unwanted hostile takeover (Sirota, 2006). Same as AgroVate plans to adopt defensive measures in line with their corporate counsel as they fear that Bijoux will lay off many employees due to its impersonal and authoritative management style.

Legally Adoption of Defensive Measures

Yes, due to the exposure of threat of management replacement and employee lay off; AgroVate can legally adopt defensive measures. According to the corporate counsel of AgroVate, by the business judgment rule the adoption of defensive measures can be protected if the threat of corporate effectiveness believes to be existed by the board of the target company; therefore the adoption of defensive response is legal for AgroVate in accordance the exposed threat to them (Maeijer & Geens, 1990). As thirty percent of the remaining AgroVate stock is owned by the three brothers, they can even adopt the preemptive defenses that include the poison pill technique. Laws that entitle original shareholders the right to buy additional shares at a discount price with the adoption of laws by the board of Target Company can create the poison pill technique; however, it is necessary that a specified percentage of the stock is acquired by the new shareholder.

Types of Mergers

There are two types of Mergers that are visible in the case study of AgroVate, one is ...