Legal Dictionary of Pakistan

poison pill

A corporation's defense against an unwanted takeover bid whereby shareholders are granted the right to acquire equity or debt securities at a favorable price to increase the bidder's acquisition costs. See SHARK REPELLENT. Cf. PORCUPINE PROVISION "Another recent tactic is the poison pill' which is a conditional stock right that is triggered by a hostile takeover and makes the takeover prohibitively expensive. The poison pill is a variation of the scorched earth defense "Thomas Lee Hazen, The Law of Securities Regulation § 11.20, at 575 (2d ed. 1990).