poison pill


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Related to poison pill: dead hand poison pill, Poison Put

poison pill

A defensive tactic used to fend off a hostile corporate take over in which a company's board of directors give shareholders the ability to buy shares at discounted prices if any one shareholder (i.e., the one seeking to take over) buys a certain percentage of the company's shares at once, thus forcing the bidding company to spend substantially more in their bid. Sensing that Gangrenous Inc. was looking to acquire their company to exploit its valuable intellectual property, the board of directors passed a poison pill to ward them off.
See also: pill, poison

poison pill

n. an element introduced into the restructuring of a corporation so that it becomes undesirable for another corporation to take over. Acme Corporation approved a poison pill to prevent a hostile takeover.
See also: pill, poison
References in periodicals archive ?
pills--then the validation of the poison pill in Moran and subsequent
The target corporation's shareholders may adopt a poison pill prior to any hostile bid being launched or they may be asked to do so in the face of a bid (a so-called "tactical" pill).
The rights plan had come under fire from a shareholder, Florida's Miramar Police Officers' Retirement Plan, which contended that since News had agreed in a 2006 settlement to limit poison pills to only one year without shareholder approval, the two-year life of the current pill exceeded the settlement.
Poison pills discourage hostile takeovers with triggers for the issuance of new shares, which weaken the power of shareholders who exceed a set stake.
(38) The foundation of Canadian poison pill jurisprudence was set by the
There are two investors who hold 14.9 percent in the company, and it had recently taken a poison pill." It was mentioned in the report that a poison pill is a strategy used by corporations to discourage hostile takeovers.
"Scotland and the rest could keep the EU membership as a leaving present or a poison pill, depending on how you look at it."
There is no consensus on the systemic effects of takeover defenses in general, or of the most important defense mechanism--the shareholder rights plan or "poison pill"--in particular.
26 January 2012 - US life sciences tools maker Illumina Inc (NASDAQ:ILMN) said today its board had adopted a rights agreement, or a so-called poison pill, to defend itself from Swiss Roche's (VTX:ROG) hostile attempt to take over the company.
The "poison pill" is a term used to describe a method in which a company tries to avoid a takeover by making its stock price less attractive.
Family Dollar received a buyout offer from investor Nelson Peltz's Trian Fund in the first quarter of the year, and not only did the dollar store chain's board reject the offer, it adopted a "poison pill" provision to discourage other unsolicited offers.
On Wednesday, the board set in motion a poison pill takeover defence.
Icahn and his hedge fund have raised their combined stake in Mentor to more than 16.1 million shares in Mentor, prompting the company to launch a poison pill proviso.
Spurred by the rapid accumulation, the B&N board enacted a shareholder rights plan, sometimes known as a "poison pill," to be triggered when a shareholder acquires more than 20 percent of B&N's outstanding stock.
Icahn said on Friday that he intended to pursue legal action against Lions Gate s poison pill. If his offer is successful, his firm, the Icahn Group, would replace the studio s board of directors with its own nominees, he said.