An anti- takeover device used by a company to protect itself from hostile bidders. There are many varieties of poison pills, the most common being the 'flip-over', which guarantees the shareholders of a company targeted for take-over the right to purchase shares in the new, merged entity at below market cost, thereby reducing the raider's gain. (See also Sugar-coated Pill).
a defense against a raider: taking action which makes the company less attractive.
A poison pill is one of the steps corporations can take to thwart hostile takeover attempts. A company employing a poison pill tactic grants shareholders the right to purchase shares below market price. This right is exercised when an unwanted suitor's stake exceeds a certain ratio. The stake in question is reduced, usually discouraging the suitor from trying to further increase its shareholdings in the target firm. Poison pill cases usually involve issuance of equity warrants. Industrial control equipment manufacturer Nireco Corp. is considered the first Japanese firm to employ this type of poison pill. For defense purposes, it granted warrants to all shareholders who were on its March 31 stockholder roster.
A defensive measure that a board can initiate to repel a HOSTILE TAKEOVER bid. There are several types of poison pills: FLIP-OVER PLANS, FLIPIN PLANS, and BACK-END PLANS. See also LOCKUP OPTION, WHITE KNIGHT.
Any tactic by a company designed to avoid a hostile takeover. One example is the issuance of preferred stock that gives shareholders the right to redeem their shares at a premium after the takeover.
A right issued by a corporation as a preventative antitakeover measure. It allows rightholders to purchase shares in either their company or in the combined target and bidder entity at a substantial discount, usually 50%. This discount may make the takeover prohibitively expensive.
An attempt to discourage an acquisition by making it more expensive or by reducing the value of the acquired business.... more on: Poison pill
the target company defends itself by making its stock less attractive to an acquirer
a financial arrangement - such as a conditional sale of a core asset at a cheap price - that would reduce the value of the target company in the event of a successful hostile bid
an item in the articles of incorporation or bylaws that triggers an event that makes the target company unattractive
a peculiar device used in the US essentially to block takeovers, or potential takeover threats
a right to buy securities of the corporation at a bargain price, with the right being triggered by a hostile takeover
a "strategy used by corporations to discourage a hostile takeover by another company
a type of financial or structural maneuver that a company may make to frustrate an attempted takeover by a hostile bidder
a weapon used by corporate boards to block a hostile takeover attempt, by flooding the market with new shares in order to prevent a bidder from acquiring a majority of the stock
A defence strategy adopted by target companies in a takeover battle to make themselves less desirable to predator companies.
Anti-takeover device that gives a prospective acquiree's shareholders the right to buy shares of the firm or shares of anyone who acquires the firm at a deep discount to their fair market value. Named after the cyanide pill that secret agents are instructed to swallow if capture is imminent.
Anti-takeover measure allowing existing shareholders right to buy the firm's shares at a deep discount.
A device designed to prevent a hostile takeover by increasing the takeover cost usually through the issuance of new preferred shares that carry severe redemption provisions. antitakeover defense, shareholder rights plan
Defensive tactics designed to fend off hostile takeovers.
A takeover defense tactic designed to make a hostile takeover prohibitively expensive. For instance, a firm may issue a new series of preferred stock that gives shareholders the right to redeem shares at a premium price after a takeover. Or a poison pill can allow all existing shareholders of the target company except the acquirers to buy additional shares at a bargain price. Such measures raise the cost of acquisition and cause dilution, hopefully deterring a takeover bid.
A corporate provision to combat hostile takeovers. When triggered, the poison pill allows shareholders to acquire additional shares at below market price, thereby increasing the number of shares outstanding and making the takeover prohibitively expensive. Such plans are relatively new in corporate Canada and are the subject of some controversy regarding whom they are designed to protect
A strategy for avoiding a hostile takeover. A company offers low-price stock to its current shareholders in order to make it more expensive for another company to buy them out.
A corporate provision to combat a hostile takeover. When triggered, the poison pill allows shareholders to acquire additional shares at below market price, thereby increasing the number of shares outstanding and making the takeover much more expensive.
Action taken by a company threatened by an unwanted takeover bid to make it appear less attractive e.g. sale of an attractive or prized asset.
a company tactic to prevent a hostile takeover, usually involving increasing debt to deter a potential buyer
Poison pill originally meant a literal poison pill (often a glass vial of cyanide salts) carried by various spies throughout history, and by Nazi leaders in WWII. Spies could take such pills when discovered, eliminating any possibility that they could be interrogated for the enemy's gain. It has since become a term referring to any strategy, generally in business or politics, to increase the likelihood of negative results over positive ones for anyone who attempts any kind of takeover.