Poison pill意思

"Poison pill" is a term used in business and finance, particularly in the context of corporate takeover defense strategies. It refers to a tactic that a company can use to make itself less attractive as a takeover target. The term "poison pill" is a metaphor for a strategy that is designed to make the company "unpalatable" to potential acquirers.

Here's how a poison pill defense works:

1. A company adopts a shareholder rights plan, which is a type of defensive measure.
2. This plan gives existing shareholders the right to buy additional shares at a discount if a hostile takeover attempt is made.
3. The result is that the acquiring company would have to spend much more money to buy the target company's shares, as the number of shares available to purchase would increase significantly.
4. This increase in the number of shares dilutes the acquirer's ownership stake and makes the takeover much more expensive, potentially deterring the takeover attempt.

The poison pill strategy is just one of several tactics that a company can use to fend off unwanted takeover attempts. Other strategies include the formation of a "white knight" alliance with a friendly company, the implementation of a "golden parachute" for key executives in the event of a takeover, and the use of "shark repellent" bylaws that make it difficult for an acquirer to gain control of the board of directors.