poison pill


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Related to poison pill: dead hand poison pill, Poison Put

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 ?
Bebchuk of Harvard Law School has proposed a statutory amendment that would mandate the repeal of a poison pill if the board loses an election that is "effectively a referendum on the pill", and thus allow the bidder to proceed with the tender offer.
decision to implement a poison pill within a relatively short period of
Thus, both poison pill varieties menace an acquirer with the prospect of severely diluting its equity investment.
Harcourt also could have adopted a poison pill in addition to relying on the protection of the control-share statute.
Last year, after the proposal won 60 per cent of shareholder votes, Delphi management adopted a plan for a committee of independent directors to review the poison pill every three years to see if it was in the best interests of the company and its shareholders.
where a binding bylaw amendment by the Union of Needletrades, Industrial and Textile Employees to require shareholder approval of the company's poison pill won 69% of the votes cast.
The first Fortune 500 firm to adopt a poison pill was Crown Zellerbach, on July 19, 1984, and the pill diffused fairly slowly after that.
3, 1987), the acquiring company in a proposed reverse triangular A-type merger was to issue its stock and poison pill rights that, in the absence of certain events, would be transferred "with and only with" the underlying shares.
We therefore cannot understand the Board's justification for adopting such a restrictive and chilling poison pill at this time just days ahead of the nomination deadline for the 2018 Annual Meeting.
SAFE WAY ADOPTS POISON PILL DEFENSE: The board of directors of Safeway Inc.
In response, GSK has added a condition to its offer requiring HGS to redeem the poison pill or, alternatively, GSK being satisfied that the pill has been invalidated or is otherwise inapplicable to GSK's acquisition of HGS.