Often used in risk arbitrage. A public company takes on significant additional debt with the purpose of either paying an extraordinary dividend or repurchasing shares, leaving the public shareholders with a continuing interest in a more financially leveraged company. Popular form of shark repellent See: Stub.
Tactic used by the target of a hostile takeover in which a company makes itself less desirable by borrowing a large sum of money and distributing it to its shareholders. see also capitalization, recapitalization.
A strategy where a company takes on significant additional debt with the purpose of either paying a large dividend or repurchasing shares. The result is a far more financially leveraged company.