I donot understand this flip over thing…how do the shareholders of the target get a right to buy the shares of the acquiring company at a discount?how does this happen…huh?:S CRAZZZZZZAY
These are right-based defenses. With flip-in, it is written in the rights of shareholders that if a buyer owns more than x%, shareholders have the right to buy some shares of their own company at a disount. With flip over, the rights say that if another company acquires our company, we have the right to purchase shares of teh acquiring company at a disount. So, if IBM wants to buy XYZ, shareholers of xyz will have the right to buy x amount of IBM shares at 10% discount from market price.
got it!!thanx…not that this is gonna be asked…but feels good to understand something…finally!