Question

Company A wants to buy company B, but company B is unwilling to sell. However, company A is able to complete a hostile takeover and purchase control of company B against its will. What is the most likely explanation for why this is possible? O

A. Company B is a cooperative, meaning that it must cooperate with any offer to purchase it for a fair market price.
B. Company B is a franchise, and company A has convinced the parent company to revoke its licenses. C. Company B is a publicly traded company, so company A can buy the majority of its ownership shares.
D. Company B is an LLC, meaning that the board of directors is not liable to protect the company's interests.​

Answer 1

The most likely explanation for Company A's ability to conduct a hostile takeover of Company B is that Company B is a publicly traded company, allowing Company A to buy a majority of its shares.

Step-by-step explanation:

When Company A wants to buy Company B but Company B is unwilling to sell, yet Company A is still able to complete a hostile takeover, the most likely explanation for why this is possible is scenario C: Company B is a publicly traded company, so company A can buy the majority of its ownership shares. Public companies have their shares bought and sold on the stock market, allowing any individual or company to purchase them. If Company A can acquire a majority of the shares, they can gain control over Company B against its will.

This is especially relevant when considering business expansion and growth, as corporate mergers and acquisitions are key methods by which a business may increase its size and market power. However, such actions are usually under scrutiny due to antitrust laws, which seek to prevent the over-concentration of market power that could hinder competitive markets.