poison pill

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Poison pill

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 government agents are said to be instructed to swallow if capture is imminent.

Poison Pill

An antitakeover measure stipulating that shareholders on the receiving end of a hostile takeover may buy shares in their own company at a price below fair market value. Once the acquisition is complete, the provision allows these same shareholders to buy more shares in the new company for below market value. This forces shareholders in the acquiring company to suffer a devaluation and dilution of their own shares. This is done to discourage hostile takeovers among the shareholders of the acquiring companies. It is important to note that a poison pill need not use both of these tactics; sometimes it utilizes only one or the other.

poison pill

An antitakeover tactic in which warrants are issued to a firm's stockholders, giving them the right to purchase shares of the firm's stock at a bargain price in the event that a suitor hostile to management acquires a stipulated percentage of the firm's stock. The poison pill is intended to make the takeover so expensive that any attempt to take control will be abandoned. See also flip-over pill, Jonestown defense, macaroni defense, suicide pill.

poison pill

see TAKEOVER BID.
Point elasticityclick for a larger image
Fig. 143 Point elasticity.

poison pill

see TAKEOVER BID.
References in periodicals archive ?
Parker, an independent director of the Company and the Chair of the Special Committee, commented, "Our Board has adopted this limited-term Rights Agreement to help ensure that the Special Committee has adequate time to consider potential strategic alternatives and to formulate the best approach to protect and enhance the interests of the Company's stockholders in a fully-informed manner.
Additional details regarding the rights agreement are contained in a Form 8-K to be filed by Orion with the Securities and Exchange Commission and in a summary to be mailed to all shareholders on or about February 15, 2009.
9% or more of the outstanding shares of Capital Trust's common stock (subject to certain exceptions), there would be a triggering event under the Rights Agreement resulting in significant dilution of the ownership interest of such person or group in Capital Trust's common stock.
ESI will send a letter to all its shareholders with further details of the Rights Agreement.
It also is not a solicitation of consents to the proposed amendments to the indentures and registration rights agreements.
Holders who tender Notes are required to consent to the proposed amendments to the indentures and the registration rights agreements.
Under his direction, SportsChannel Florida has entered into long-term programming rights agreements with Major League Baseball's Florida Marlins and Tampa Bay Devil