Back Giftpille (Wirtschaft) German Κίνητρα αντίστασης στην επιθετική εξαγορά Greek Píldora envenenada Spanish طرح حقوق سهامداران FA Myrkkypilleri (kauppaoikeuslauseke) Finnish Pilule empoisonnée French Poison pill Italian 포이즌 필 Korean Trujące pigułki Polish 毒丸计划 Chinese
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.
Typically, 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.[1] The plan could be triggered, for instance, if any one shareholder buys 20% of the company's shares, at which point every other shareholder will have the right to buy a new issue of shares at a discount. If all other shareholders can buy more shares at a discount, such purchases would dilute the bidder's interest, and the bid cost would rise substantially. Knowing that such a plan could be activated, the bidder could be discouraged from taking over the corporation without the board's approval, and would first negotiate with the board to revoke the plan.[2]
The plan can be issued by the board of directors as an "option" or a "warrant" attached to existing shares, and it can only be revoked at the board's discretion.
- ^ Institute, Corporate Finance. "Poison Pill". Corporate Finance Institute. Archived from the original on 2022-07-02. Retrieved 2022-07-12.
- ^ For a description of a standard rights plan, see Wachtell, Lipton, Rosen & Katz, The Share Purchase Rights Plan in Ronald J. Gilson & Bernard S. Black, The Law and Finance of Corporate Acquisitions (2d ed. Supp. 1999) at 10-18.