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1 type of a poison pill is the “flip-in” which 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 is, this acquirer already has some shares in the target company and it wants to acquire more shares to gain effective control so by giving other shareholders apart from them this privilege isn’t it going against the principle of equal treatment of shareholders?
Your quick response will highly be appreciated.
As an existing shareholder, the acquirer will have previously agreed to the poison pill, and there is equal treatment in that if one of the other shareholders had become the acquirer then the same rule would have applied to them.
(With regard to quick response, we state that we will always reply within 48 hours, but almost always we do so well within 24 hours 🙂 )
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