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A shareholder rights plan, colloquially known as a "poison pill", is a type of defensive tactic used by a corporation's board of directors against a takeover.. In the field of mergers and acquisitions, shareholder rights plans were devised in the early 1980s to prevent takeover bids by limiting a shareholder's right to negotiate a price for the sale of shares directly.
Just last week, Bill Ackman resigned from the board of directors of J.C. Penney (NYSE: JCP), after several weeks of tense and arduous disagreement over the direction and leadership of the company.
By the end of the decade, management of many large publicly traded corporations reacted negatively to the threat of potential hostile takeover or corporate raid and pursued drastic defensive measures including poison pills, golden parachutes and increasing debt levels on the company's balance sheet. Finally, in the 1990s the overall price of ...
Southwest Airlines has adopted a ‘poison pill’ following activist investor Elliott Investment Management taking a significant stake in the company.
The strategy can build wealth quickly when employed wisely. ... the corporate raider withdrew only after Lockheed put up a stubborn poison-pill defense and won a hard fought proxy contest ...
In this strategy, the target firm engages in tactics that might threaten the firm's existence to thwart an imposing acquirer's bids. This is also known as a "suicide pill", [1] and is an extreme version of the poison pill. [2]
Burlington, Mass.-based Nuance Communications today announced what it is calling a stockholder rights plan. The plan, which some refer to as a "poison pill," aims to put the brakes on any ...
A takeover defense plan (such as a poison pill) need not be laid out by management prior to a takeover attempt in order to be fair. Stock warrants that discriminate against certain shareholders with the aim of supporting the company's management or retaining control in shareholders who support said management is blatantly unfair.