Rump

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Rump

Usually used in the context of a merger or acquisition. A group of shareholders who refuse to tender their shares for a merger or acquisition. In a merger of Company A and Company B for example, if a sufficient number of Company B shareholders do not tender their shares, the new company will not be able to access the cash flows of Company B.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Rump

In a merger or acquisition, the shareholders who refuse to sell their stock. If the merger or acquisition is successful, the rump becomes powerless; however, refusal to sell can deprive the acquiring company from some of the company's cash flow. This can discourage the acquiring company from completing the merger or acquisition in the first place.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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