Scorched Earth Policy (redirected from scorched earth policies)

Scorched Earth Policy

An anti-takeover strategy that a firm undertakes by liquidating its valuable and desired assets and assuming liabilities in an effort to make the proposed takeover unattractive to the acquiring firm.

Notes:

In extreme cases, this strategy might end up being a 'suicide pill'.

The scorched earth policy is actually a classic military strategy: generals would instruct troops to burn any land/crops/trees as they retreated so there would be no supplies to refresh the advancing army.

See also: Busted Takeover, Enterprise Value, Hostile Takeover, Jonestown Defense, Management Buyout - MBO, Merger, Poison Pill, Sandbag, Saturday Night Special, Shark Repellent, Sleeping Beauty, Suicide Pill, Voting Shares, Whitemail