People Pill

Dictionary Says

Definition of 'People Pill'

A defensive strategy to ward off a hostile takeover. The target company's management team threatens that, in the event of a takeover, the entire team will resign. The purpose of a people pill is to discourage the acquiring company from completing the takeover, by introducing the possibility of having to put together an entirely new management team. This strategy is only effective if the acquiring company wants to keep the existing management.
Investopedia Says

Investopedia explains 'People Pill'

The first use of the people pill anti-takeover strategy is attributed to a food company called the Borden Corporation. In 1989, the company's board of directors approved a people pill that Borden could use to demand that an acquiring company pay a fair value for the company's shares and that it not fire or demote any of Borden's existing managers. The people pill strategy is a variation of the poison pill defense. Other takeover defenses include staggered boards, golden parachutes and shareholder rights plans.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Hostile Takeover

    The acquisition ...
  2. Proxy Fight

    When a group of ...
  3. Macaroni Defense

    An approach ...
  4. Shark Repellent

    Slang term for ...
  5. Shark Watcher

    A firm ...
  6. Safe Harbor

    1. A legal ...
  7. Target Firm

    A company which ...
  8. Suicide Pill

    A defensive ...
  9. Saturday Night Special

    An obsolete ...
  10. Poison Pill

    A strategy used ...

Articles Of Interest

  1. Mergers And Acquisitions: Understanding Takeovers

    In the dramatic world of M&As, battleground terms meld with bizarre metaphors to form the language of the game.
  2. The Merger - What To Do When Companies Converge

    Learn how to invest in companies before, during and after they join together.
  3. Trade Takeover Stocks With Merger Arbitrage

    This high-risk strategy attempts to profit from price discrepancies that arise during acquisitions.
  4. Trademarks Of A Takeover Target

    These tips can lead you to little companies with big prospects.
  5. Pinpoint Takeovers First

    Use these seven steps to discover a takeover before the rest of the market catches on.
  6. Corporate Takeover Defense: A Shareholder's Perspective

    Find out the strategies corporations use to protect themselves from unwanted acquisitions.
  7. Carl Icahn's Investing Strategy

    Buying up failing investments and turning them around helped to create the "Icahn lift" phenomenon.
  8. Finding Solid Buy-And-Hold Stocks

    Find out how to look at the big picture - even when the market's short-term outlook is less than rosy.
  9. Female Managers Can Raise Share Values

    Women are quite capable of proving their worth in raising corporate value through various financial, managerial and human capabilities.
  10. Introduction To Incentive Stock Options

    Here are some basic highlights of how ISOs work and the ways they can be used.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center