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Definition of 'Flip-In Poison Pill'
A type of poison pill strategy in which existing shareholders, but not acquiring shareholders, are allowed to purchase shares in the target company at a discount. A flip-in poison pill takeover defense dilutes the value of the shares purchased by the acquiring company by flooding the market with new shares, while also allowing investors who purchase the new shares to profit instantaneously from the difference between the discounted purchase price and the market price.
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Investopedia explains 'Flip-In Poison Pill'
Poison pill provisions are often found in a company's bylaws or charter as a public display of their potential use as a takeover defense. This tells any company thinking about a hostile takeover that they will face a lot of difficulties. Companies looking to fight this strategy may try to have a court dissolve any program providing the deep discount, but the chances of success are uncertain.
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Search results for 'Flip-In Poison Pill'
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http://www.investopedia.com/articles/01/050901.asp
... (To learn more about these and other shareholdersÂ’ rights, see Knowing Your Rights
as a Shareholder.) The goal of the flip-in poison pill is to dilute the ...
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http://www.investopedia.com/articles/01/050201.asp
... price (usually a 10-20% discount). This maneuver is sometimes referred
to as a "flip-in poison pill". By being able to purchase ...
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