What is a Corporate POISON PILL?

Arcane Financial Tactic

By Staff Reporters

I. DEFINITION: A poison pill is a defense tactic utilized by a target company to prevent or discourage hostile takeover attempts. Poison pills allow existing shareholders the right to purchase additional shares at a discount, effectively diluting the ownership interest of a new, hostile party.

KOHLS News: https://www.cnbc.com/2022/02/04/kohls-says-takeover-offers-undervalue-its-business.html

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II. DEFINITION: A hostile takeover refers to the acquisition of one company by another corporation against the wishes of the former. The company being acquired in a hostile takeover is called the target company while the one executing the takeover is called the acquirer. In a hostile takeover, the acquirer goes directly to the company’s shareholders or fights to replace management to get the acquisition approved. Approval of a hostile takeover is generally completed through either a tender offer or a proxy fight.

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CITE: https://www.r2library.com/Resource/Title/082610254

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MORE: https://www.wallstreetmojo.com/poison-pills/

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FINANCE: https://www.amazon.com/Comprehensive-Financial-Planning-Strategies-Advisors/dp/1482240289/ref=sr_1_1?ie=UTF8&qid=1418580820&sr=8-1&keywords=david+marcinko

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The Non-Medical “POISON PILL” Strategy is in the Investing News!

MUSK versus TWITTER

By Staff Reporters

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DEFINITION: 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 as a way to prevent takeover bids by taking away a shareholder’s right to negotiate a price for the sale of shares directly.

Typically, according to Wikipedia, such a plan gives shareholders the right to buy more shares at a discount if one shareholder buys a certain percentage or more of the company’s shares. The plan could be triggered, for instance, if any one shareholder buys 20% of the company’s shares, at which point every shareholder (except the one who possesses 20%) will have the right to buy a new issue of shares at a discount. If all other shareholders are able to buy more shares at a discount, such purchases would dilute the bidder’s interest, and the cost of the bid would rise substantially. Knowing that such a plan could be activated, the bidder could be disinclined to take over the corporation without the board’s approval, and would first negotiate with the board in order to revoke the plan.

CITE: https://www.r2library.com/Resource/Title/082610254

The plan can be issued by the board of directors as an “option” or a “warrant” attached to existing shares, and only be revoked at the discretion of the board.

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READ: https://www.msn.com/en-us/money/companies/twitter-adopts-poison-pill-plan-to-block-elon-musks-bid/ar-AAWfUaZ?li=BBnb7Kz

MUSK: https://www.cbsnews.com/news/twitter-poison-pill-elon-musk/

TWITTER: https://www.msn.com/en-us/money/companies/twitter-activates-poison-pill-to-thwart-musk-hostile-takeover-attempt/ar-AAWgmwW?li=BBnb7Kz

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FINANCE: https://www.amazon.com/Comprehensive-Financial-Planning-Strategies-Advisors/dp/1482240289/ref=sr_1_1?ie=UTF8&qid=1418580820&sr=8-1&keywords=david+marcinko

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