Business any defensive measure for preventing the takeover of a corporation by making its acquisition prohibitively expensive for the party attempting to acquire it
A strategy intended to make a hostile takeover of a corporation more difficult, as by granting of special rights to existing shareholders upon the occurrence of the purchase of a significant amount of stock by an intended acquirer.
(plural poison pills)
(business) Any strategy designed to produce negative results for an entity carrying out a takeover.
(politics) A provision in a bill that leads to people who would have supported it opposing it instead
poison pill - Investment & Finance Definition
financial tactic that is designed to make an unfriendly takeover very difficult
to accomplish. Often poison pills come in the form of share-rights plans that
allow existing stockholders to purchase stock at some fixed price if a takeover
bid occurs. At that time, all shareholders, except for the new, outside
shareholders, are given the option to buy stock at a sharp discount, which
dilutes the ownership of the new shareholder, and thus effectively makes it
more difficult for it to exert influence.