What is a poison pill strategy?

A poison pill strategy is a defense tactic used in corporate law by a company to prevent hostile takeovers. It is often used by companies in Washington state in order to protect their assets and keep them under their control. The strategy works by granting shareholders the right to purchase additional shares of the company at a discounted rate if a potential acquirer acquires more than a certain percentage of the target company’s stock. This would dilute the acquirer’s interest and make it significantly more expensive to buy a controlling stake in the company. Poison pill strategies are often triggered by a certain level of stock ownership or takeover bid. This can discourage potential acquirers since they may not want to deal with the increased costs or risks associated with such a strategy. As such, the poison pill is often used to protect a company’s interests and avoid having to agree to any terms a potential acquirer may impose upon them.

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What is a poison pill strategy?

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