Management and conflict of interests?

Question

Company A wants to acquire company B. It proposes to buy company B's stock for a premium of 30%. Company B management considers the offer excellent, but company A has made it public that it will get rid off company B management as soon as the merger succeeds, this point is non-negotiable. Company B's shareholders ask company B management what if they think the offer is fair. What should management tell the shareholders?

Answer 1

If the deal is good for the shareholders, company B's management has an ethical obligation to be honest with the share holders.

Answer 2

Hi

the management got the fiduciary duty to tell the truth especially to their shareholders

The shareholders of B may give some kind of retrenchment benefits and work out a plan if the deal is really worth to let go