Types of Poison Pills - M&A in Legal English

Poison pills dilute the acquiring company's ownership stake, making the takeover more expensive and challenging.

Two main types are detailed: flip-in pills, which allow existing shareholders to buy discounted shares, and flip-over pills, granting post-merger discounted share purchases. These tactics significantly hinder hostile takeover attempts.

The overall goal is to deter unwanted acquisitions by increasing their cost and complexity.

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