Flip-over Poison Pill Plan
The most popular type of poison pill anti-takeover defense. Shareholders of the target firm are issued rights to purchase common stock at an exercise price high above the current market price. If a merger occurs, the rights flip over and allow shareholders to purchase the acquiring firm’s common stock at a substantial discount.
Originally written on
December 3, 2010
and last modified on
January 19, 2018.
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