suicide pill

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Suicide pill

A hostile takeover prevention tactic that could destroy the target company. Taking on a large amount of debt to prevent the takeover might cause bankruptcy, for example.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Suicide 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. In essence, a suicide pill is identical to a poison pill except for degree; the term suicide pill indicates that the target company may intentionally go bankrupt, rather than simply weaken itself.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

suicide pill

A poison pill provision so devastating to the target of a takeover attempt that the target company may have to be liquidated to satisfy its creditors. For example, the company's directors may institute a suicide pill giving stockholders the right to exchange their stock for debt if a raider acquires more than a specified percentage of the company's outstanding shares. The tremendous increase in debt will effectively doom the target company if the takeover attempt is successful.
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.
References in periodicals archive ?
The suicide pill idea was recently raised in the Dutch federal parliament, with the Netherlands the world's first country to legalise euthanasia in April this year.
He indicates that the wartime victory speed limit was thirty-five miles per hour and that the crew of the Enola Gay carried suicide pills to use if they were captured.
They carried suicide pills to take rather than be captured.
The bill authorizes doctors to prescribe suicide pills for patients that have been diagnosed with an illness that might cause them to die within 6 months.
Hitler passed out suicide pills to all his heads of staff, and he ended his life as one of the most pitifully lonely people to walk the earth.
The Government offers free suicide pills to those who can't cope with the hopelessness.
A few weeks ago, some Brown University undergraduates conceived of a unique antiwar statement: a student referendum calling on their campus infirmary to obtain a supply of suicide pills to be made available in the event of nuclear war.
In neighboring Oregon, where assisted suicide is already legal, the state has refused to cover the cost of life-sustaining treatments for some patients facing terminal illness, while callously informing them that Oregon will pay for suicide pills. Such policies betray the ideal of America as a compassionate society honoring the inherent worth of every human being.
They all carried suicide pills - known as "cough drops" - and after every sabotage operation they would leave behind a British Army beret so that the Germans wouldn't carry out reprisals on local villages.
The potential for disaster is huge with the size of Russia's nuclear arsenal enough to make the most hardened optimist reach for the suicide pills.
JIM SMITH has warned Derby's players against swallowing their soccer suicide pills at Highbury tonight.