Mergers

Question 1

What are the general requirements for a merger or consolidation?

Answer 1

• shareholders of the target must approve a plan of merger
• articles of merger must be filed with the secretary of state
• there must be an appraisal buyout of dissenting shareholders

Question 2

What is the exception to the rule that mergers must be approved by shareholders?

Answer 2

If a parent corporation owns at least 90% of its subsidiary.

Question 3

If a foreign corporation solicits shareholders with a tender offer, what is required?

Answer 3

(1) All shareholders must be offered the same price.
(2) The board must consider all bona fide written proposals and respond within 30 days.
(3) The board has a duty to obtain the highest price for shareholders.