Crown jewel

A particularly profitable or otherwise particularly valuable corporate unit or asset of a firm. Often used in risk arbitrage. The most desirable entities within a diversified corporation as measured by asset value, earning power, and business prospects; in takeover attempts, these entities typically are the main objective of the acquirer and may be sold by a takeover target to make the rest of the company less attractive. See: Scorched earth policy.

Crown Jewel

1. A particularly valuable or important asset that a company owns. For example, a car manufacturer's three best producing factories may be considered its crown jewels.

2. Describing an antitakeover measure in which a company sells many or all of its crown jewel assets. A crown jewel policy is designed to make the company less attractive to potential acquirers. The obvious disadvantage to a crown jewel policy is the possibility that, even if the company remains independent, the lack of its crown jewels may render it unable to maintain its operations easily. It is a type of scorched earth policy. See also: Poison pill, Suicide pill.

crown jewel

1. A prized asset of a company.

2. Used to refer to a part of a business that is sought by another firm or an investor in a takeover attempt that is hostile to the target firm's management. Compare scorched earth.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.