Scorched-earth policy


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Scorched-earth policy

Often used in risk arbitrage. Any technique a company that has become the target of a takeover attempt uses to make itself unattractive to the acquirer. For example, it may agree to sell off its crown jewels, or schedule all debt to become due immediately after a merger.

Scorched Earth Policy

An antitakeover measure in which a company sells many or all of its "good" or desirable assets and/or issues an extraordinary amount of debt. A scorched earth policy is designed to make the company less attractive to potential acquirers. The obvious disadvantage to a scorched earth policy is the possibility that, even if the company remains independent, it may have acquired so many liabilities that it may not be able to maintain its operations easily. See also: Poison pill, Suicide pill.
References in periodicals archive ?
"If true," he maintains, "you could apply a scorched-earth policy to [routing] them" with caffeine or citric acid.
A prosecution witness told the UN war crimes tribunal in The Hague that Slobodan Milosevic's security forces threatened to wipe out hundreds of ethnic Albanian villages in Kosovo as part of a 'scorched-earth policy'.
Often times, a scorched-earth policy, like the one imposed by Dunlap, can cause corporate-side distress.
If they continue to pursue a scorched-earth policy, they'll be defeated in the next election, and the environmental rules will come out stronger as a result.
The former Chief Constable of West Yorkshire said: "The scorched-earth policy was often ineffective and the war against drugs needed a global, multi-agency approach.
The former Chief Constable of West Yorkshire Police said: 'The scorched-earth policy was often ineffective and the war against drugs needs a global, multi agency approach.
"The establishment of the militia groups had been systematic, the process of violence developed systematically, ending up in a scorched-earth policy," he said.
Nice guy Alex may be, but when it comes to his enemies he operates a scorched-earth policy.
This region was one of the most severely affected by the scorched-earth policy adopted by the government headed by Gen.
Leaning on the Americans, no matter how gently, only produces a heavy-handed backlash and Jack Valenti, the tough-talking Texan who is head of the Motion Picture Association of America will once again descend on Ottawa like a ton of bricks threatening, in his own subtle, charming way, a scorched-earth policy if one penny of American profits are curtailed.
The last Portuguese governor is praised for not following instructions to institute a scorched-earth policy. Of his daughter's marriage to Mervin, Dom Manuel thinks, "Class and caste would slowly disappear.
He adopts a real scorched-earth policy in his interpretation of the American Dream--and, of course, nothing embodies the American Dream more succinctly than tract housing.