Shark Repellent

AAA

DEFINITION of 'Shark Repellent'

Slang term for any one of a number of measures taken by a company to fend off an unwanted or hostile takeover attempt. In many cases, a company will make special amendments to its charter or bylaws that become active only when a takeover attempt is announced or presented to shareholders with the goal of making the takeover less attractive or profitable to the acquisitive firm.

Also known as a "porcupine provision."

INVESTOPEDIA EXPLAINS 'Shark Repellent'

Most companies want to decide their own fates in the marketplace, so when the sharks attack, shark repellent can send the predator off to look for a less feisty target.

While the concept is a noble one, many shark repellent measures are not in the best interests of shareholders, as the actions may damage the company's financial position and interfere with management's ability to focus on critical business objectives. Some examples of shark repellents are poison pills, scorched earth policies, golden parachutes and safe harbor strategies

RELATED TERMS
  1. Lobster Trap

    A strategy used by a target firm to prevent a hostile takeover. ...
  2. Suicide Pill

    A defensive strategy by which a target company engages in an ...
  3. Golden Parachute

    Substantial benefits given to a top executive (or top executives) ...
  4. Sleeping Beauty

    A company that is considered prime for takeover, but has not ...
  5. Scorched Earth Policy

    A takeover prevention strategy in which the target company seeks ...
  6. Shark Watcher

    A firm specializing in the early detection of takeovers. The ...
Related Articles
  1. Bonds & Fixed Income

    War's Influence On Wall Street

    Blitzkrieg? Dawn raids? Sounds like the markets and the battlefield have a few things in common.
  2. Fundamental Analysis

    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.
  3. Mutual Funds & ETFs

    Corporate Takeover Defense: A Shareholder's Perspective

    Find out the strategies corporations use to protect themselves from unwanted acquisitions.
  4. Options & Futures

    The Basics Of Mergers And Acquisitions

    Learn what corporate restructuring is, why companies do it and why it sometimes doesn't work.
  5. Investing Basics

    Poison Pill

    A poison pill is a corporate maneuver put in place to try and prevent a hostile takeover. The target corporation uses this strategy to make its stock less attractive to the acquirer. This is ...
  6. Fundamental Analysis

    Why would I need to know how many outstanding shares the shareholders have?

    Find out why shareholders should know how many outstanding shares have been issued by a corporation, and learn what happens when more shares are issued.
  7. Fundamental Analysis

    How do you use Microsoft Excel to calculate liquidity ratios?

    Learn how to calculate the most common liquidity ratios in Microsoft Excel by inputting financial figures from a company's balance sheet.
  8. Economics

    America's Most Notorious Corporate Criminals

    Learn about the crimes and punishments of some of the most infamous convicted white-collar crooks.
  9. Investing Basics

    What is revenue cycle management?

    Learn more about revenue cycle management and why the healthcare industry in particular has adopted this payment process philosophy.
  10. Fundamental Analysis

    Is it important for a company always to have a high liquidity ratio?

    Understand the significance of the liquidity ratio and how it is used in conjunction with other measures to arrive at an overall evaluation of a company.

You May Also Like

Hot Definitions
  1. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  2. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  3. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  4. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  5. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  6. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
Trading Center