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Discussion Question:

Poison Pill is an anti-takeover strategy, which is practiced by a company to create protection against hostile takeover. The target company may adopt different poison pill techniques for making the cost of acquisition suddenly unattractive for hostile bidder. In other words, the target company tries to make its stock less attractive to the acquirer company. For example, the target company can take on extra debt to depict itself as overleveraged and potentially riskier. There are certain other techniques a company can adopt to exercise the poison pill strategy. You are required to discuss any two techniques (other than the one mentioned in above example) along with conceptual rationale.

Note: Here conceptual rationale means that you need to elaborate how your mentioned techniques would help the target company to avoid hostile takeover.

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Replies to This Discussion

Come on Start everyone 

A strategy used by corporations to discourage hostile takeovers. With a poison pill, the target company attempts to make its stock less attractive to the acquirer. There are two types of poison pills: 

1. A "flip-in" allows existing shareholders (except the acquirer) to buy more shares at a discount. 

2. A "flip-over" allows stockholders to buy the acquirer's shares at a discounted price after the merger.

Very Interesting topic.

I think the note at the end of the GDB is the Serious Note. :)

Best of Luck!  

bilkul .....but mujhy smajh ni ai gdb ki ...

Read & Listen Lecture # 35

zohaib Malik  mujy v zra smj ni ai

ALLAH pochy GDB deny wly sy abi m to 35 lecture pr pounchi he ni hu

Lecture 35, Page # 120 

iss say sasti sirf khamoshi 

Poison Pill?

جاسوس لوگ اپنے پاس ایک زہریلا کیپسول رکھتے ہیں کہ اگر دشمن نے پکڑ لیا تو وہ زہریلا کیپسول نگل کر مر جایئں گے اور یوں دشمن کوئی راز نہیں اگلوا سکے گا۔

مطلب یہ کہ اس جاسوس کو پکڑنے سے دشمن کو کوئی فائدہ نہیں ہوگا۔

اسیطرح جب ایک کمپنی کسی دوسری کمپنی پہ بغیر اسکی مرضی کے قبضہ (ہوسٹائل ٹیک اور) کرنے کی کوشش کرتی ہے تو مقبوضہ کمپنی بھی زہریلا کیپسول کھا لیتی ہے اور یوں مقبوضہ  کمپنی یا تو بچ جاتی ہے یا پھر درد سر بن جاتی ہے۔

 یہاں بنیادی طور پر کارپوریٹ پولیٹکس کھیلی جاتی ہیں جن میں ظاہر ہے کارپوریٹ فنانشل ٹولز استعمالکیے جاتے ہیں۔

بس کوئی 2 اسی چالیں بتا دیں جن سے قابض کمپنی کو لینے کے دینے پڑ جائیں تو انسٹرکٹر بھی خوش اور آپ بھی خوش

 Amir - عامر مغل 16 INSTRUCTOR KO TO AB KOI BARA KAPSOL HE KHILNA PARA GA KIA YAD KRY GA WO B.

عامر مغل cha gaye tm bhai... nice style....
ab b smj na aaye to parna chor dena chahye

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