Financial poison pill
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Financial poison pill (or, simply, poison pill or poison pills) is shareholder rights provision that allows existing shareholders in a company to purchase additional shares of stock at a lower-than-market value if a potential acquirer purchases a controlling stake in the company.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Poison pills. Shareholder rights provisions that allow existing shareholders in a company to purchase additional shares of stock at a lower-than-market value if a potential acquirer purchases a controlling stake in the company.
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Poison pill. An action that will seriously hurt a company if it is acquired by another.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
