Cengage Advantage Books: Fundamentals of Business Law Today 10th Edition by Roger LeRoy Miller

Exercise 11

Corporate Merger. Alir owns 10,000 shares of Ajax Corp. Her shares represent a 10 percent ownership interest in Ajax. Zeta Corp. wishes to acquire Ajax in a merger, and the board of directors of each corporation has approved. The shareholders of Zeta have already approved as well, and Ajax has called for a shareholders' meeting to vote on the merger. Alir disapproves of the merger and does not want to accept Zeta shares for the Ajax shares she holds. The market price of Ajax shares is $20 per share the day before the Ajax shareholder vote. On the day of the vote, the shareholders approve the merger, and the share price drops to $16. Discuss Alir's rights in this matter, beginning with the notice of the proposed merger. (See Mergers and Acquisitions.)