Definition, Meaning & Synonyms

poison-pill

noun

/ˈpɔɪ.zən pɪl/

Definition

A strategy used by companies to prevent hostile takeovers by making the acquisition less attractive to the potential buyer.

Examples

Many corporations adopt a poison-pill strategy to protect their interests.
The board of directors decided to implement a poison-pill in response to the takeover bid.
By issuing new shares, the company effectively deployed its poison-pill defense.

Meaning

The term ‘poison pill’ refers to tactics that management can employ to thwart unwanted takeover attempts, typically by diluting the value of their shares or making the company less appealing to potential acquirers.