Shark Repellent

shark repellent

A strategy used by corporations to ward off unwanted takeovers. Examples of this antitakeover measure include making a major acquisition, issuing new shares of stock or securities convertible into stock, and staggering the election of directors. Shark repellents often benefit corporate officers more than the stockholders. Also called takeover defense. Compare show stopper. See also poison pill.

---

Shark Repellent

A provision or amendment in a corporation's charter stating certain measures the corporation's management may take to discourage unwanted or hostile takeovers. One example of shark repellent is the macaroni defense, in which the company issues a large number of bonds with the proviso that they must be redeemed at a high price if the company is taken over. It is also called a porcupine provision or, more formally, an antitakeover measure. See also: Shark watcher.