Valuation – Potential consequences of different responses by directors in receipt of a takeover approach
Recommend at too low a price and the deal gets rejected outright by shareholders
Recommend at a level that shareholders don't like so shareholders force a bump
Recommend/welcome at a price but open door to auction process
Reject publicly but leave door open to recommend a higher offer
Reject outright without shareholders' knowledge and risk later shareholder criticism if it becomes public
