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Greetings.
I need your assistance in understanding this concept.
One type of a poison pill is a “flip-in” where it allows existing shareholders (except the acquirer) to buy more shares at a discount, thus investors get instant profits and more importantly they dilute the shares held by the acquirer. This makes the takeover attempt more difficult and more expensive.My question now is this, according to the EU takeover directive and the UK City Code, all shareholders are supposed to be treated equally, so now how can 1 group of shareholders be allowed to buy shares cheaply than another group?
Thank you in advance.
The existing shareholders are being treated equally, and they are entitled to approve measure that will affect a new shareholder in the even of a takeover bid.
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