A shark repellent tactic, such as staggering board terms, is an example of which corporate strategy?

A shark repellent tactic, such as staggering board terms, is an example of which corporate strategy?

• A. Competitive bidding
• B. Spin-off
• C. Takeover defense
• D. Merger termination

Answer: (C)

Defensive measures against hostile takeovers are often called shark repellents. Staggering board terms is a classic example because it makes it harder for a would-be acquirer to quickly gain control of the company. With only a portion of directors up for election each year, the bidder can’t replace the entire board at once, which slows or deters a takeover and buys management time to pursue alternatives or negotiate. This isn’t about how a deal is pursued (competitive bidding), creating a new independent entity from a subsidiary (spin-off), or ending merger negotiations (merger termination). It’s a strategic guardrail designed to defend the company from a hostile approach.

Defensive measures against hostile takeovers are often called shark repellents. Staggering board terms is a classic example because it makes it harder for a would-be acquirer to quickly gain control of the company. With only a portion of directors up for election each year, the bidder can’t replace the entire board at once, which slows or deters a takeover and buys management time to pursue alternatives or negotiate.

This isn’t about how a deal is pursued (competitive bidding), creating a new independent entity from a subsidiary (spin-off), or ending merger negotiations (merger termination). It’s a strategic guardrail designed to defend the company from a hostile approach.