What is a poisonous pill plan?
In all anti-acquisition cases, PoisonPill has long been an ideal weapon for a long time. The Poison Pill Plan is invented by the famous M & A lawyer in the United States in 1982, the official name is "equity diluted anti-acquisition measures", the initial form is very simple, that is, the target company issued a preferred share of ordinary shareholders. Once the company is acquired, the priority shares held by shareholders can be converted into a certain amount of acquirer stock. In the most common form, once the target company has acquired a large shares (typically 10% to 20% of shares), the poisonous pills will be launched, leading to the market. Once the poisonous pills are triggered, all other shareholders have the opportunity to buy new stocks at low prices. This greatly dilute the equity of the acquirer, but then make the acquisition becomes high, thus achieving the purpose of boycotting the acquisition. More than 2,000 companies have this tool in the United States.
"Poison" program is generally divided into "pop-up" plans and "income" plans. "Pophang" plan usually refers to fulfilling the share options and purchase priority stocks. For example, priority stocks purchased with 100 yuan can be converted into a target company's 200 yuan stock. The initial impact of "pop-up" program is to improve the minimum price of shareholders who are willing to accept in the acquisition. If the target company's share price is 50 yuan, then shareholders will not accept all the acquisitions below 150 yuan. Because 150 yuan is a premium obtained from the shareholders, it is equal to 50 yuan for stock costs. At this time, the minimum stock premium available by shareholders is 200%.
In the "pop-in" program, the target company purchases its own share options with a high premium, usually the premium is as high as 100%, that is, the 100 yuan priority stocks are purchased back in 200 yuan. The major shareholders who host hostile purchases or triggering this event are not repurchased. This dilutes the rights of the acquisition in the target company. "Pop" program is often included in an effective "pop-up" program. "Poison Pill" plans to be legalized in the US DELAWANCECHANCERY Court, because it does not require direct approval of shareholders, so it is widely used in the late 1980s .
