Shareholder Rights Plan

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Also referred to as a "poison pill," a shareholder rights plan is a strategy companies use to discourage hostile takeovers. With a poison pill, the target company attempts to make its stock less attractive to the acquirer. Generally, there are two types of poison pills: (i) "flip-in" allows existing shareholders (except the acquirer) to buy more shares at a discount, and (ii) "flip-over" allows stockholders to buy the acquirer's shares at a discounted price after the merger.
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