Explanation

It helps to get management of a target company on board for a merger, but it isn't essential. On the other hand, it is essential to acquire enough stock to realize control of the target company. Management and directors can be very helpful in obtaining shareholder approval, but an acquiring company can go directly to shareholders through a tender offer, even if management and directors oppose the deal.

Verified Answer

To complete an acquisition, the acquiring company needs to have the approval of the directors and shareholders, even if management approves. It is the shareholders that own the target company, so ultimately, an acquiring company must get at least 51% of the outstanding shares to take control. That could mean a tender offer, even if management is favorable to the deal.