Rights Agreement

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Rights Agreement (aka "Poison Pill")

An anti-takeover arrangement often established by a company in anticipation of a hostile takeover attempt. The company appoints a Rights Agent who will issue Rights Certificates to each shareholder at the time of the takeover attempt. The shareholder may then exercise these rights to receive additional shares of stock and/or debentures, making the target company more expensive to acquire as a result of the additional shares outstanding, or the additional debt.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
In case of such failure, the citizens' rights agreement will by then have been ratified in the UK parliament (thanks to the ringfencing mechanism), and enter into force on Brexit day as the only Article 50 withdrawal agreement.
Supporters of the nascent, new basing rights agreement are so gung-ho about their idea, but conveniently forget facts about continued US military presence in the country.
The 3D license covers both the area subject to the Deep Oil Rights Agreement and parts of the Company's North West Cook Inlet Unit, including the areas over which the Company is permitted to drill two wells.
Provider of overnight air freight service Air T Inc (NASDAQ Capital Market:AIRT) on Monday announced that its board of directors has adopted a Rights Agreement.
The naming rights agreement will see a re-branding of the building, renaming of its website to www.motorpointarenacardiff.co.uk and the inclusion of the Motorpoint logo on tickets, advertising and posters.
MLB had countersued, saying it backed out of a letter of intent to renew the beer contract because Anheuser-Busch withheld "the material fact that A-B was about to sign a promotional rights agreement with the National Football League."
The court filing by MLBP goes on to say, "In that April Letter of Intent, both parties expressly recognized that they would need to negotiate a definitive "Promotional Rights Agreement" containing all of the terms and conditions necessary to grant A-B the promotional rights it sought from MLBP.
ISLAMABAD, June 5 -- Belgium fully supports Pakistan to have European Union's Generalised System of Preferences (GSP) Plus facility, however, Pakistan has to ratify the human rights agreement, which is one of the basic conditions for getting GSP Plus facility, said Ambassador of Belgium, Hans Christian Kint while addressing business community at Islamabad Chambers of Commerce & Industry (ICCI).
The facility includes a capacity rights agreement with JSR, based in Japan.
In the model, a period of free riding, during which a defecting firm is paid by other firms but does not pay others, is followed by permanent exclusion from the property rights agreement, in which access to its complementary capital is limited.
As there is no immediate military solution, a political and constitutional human rights agreement must be achieved to end the conflict.
Rubicon and MBC had earlier signed the licensing and broadcast rights agreement for the new cartoon series, which revolves around the adventures of two pre-teen boys: American "Ben" and Jordanian "Issam".