Anti- takeover device that gives a prospective acquiree's shareholders the right to buy shares of the firm or shares of anyone who acquires the firm at a deep discount to their fair market value. Named after the cyanide pill that secret government agents are said to be instructed to swallow if capture is imminent. Bloomberg Financial Dictionary
See also: rights agreement
* * *
something in a company's financial or legal structure that is meant to make it difficult for another company to buy it in a takeover:
• The company's poison pill anti-takeover measure prevents a group from purchasing more than 10% of its stock.
— see also shark repellent* * *
Actions taken by a company to outwit a predator in a potential hostile takeover, so that swallowing the company will be like swallowing a poison pill. Examples are the issue of high yielding bonds, conditional rights to shareholders to buy shares at a large discount if the takeover succeeds or making massive long-term commitments to the company's pension funds.
* * *
poison pill UK US noun [C]
► FINANCE, MANAGEMENT, WORKPLACE something that a company does to make itself less attractive to another company that might want to buy it: »
A poison pill defence is any strategy used by a company to protect itself from a hostile takeover bid.
Financial and business terms. 2012.