Flip Over Poison Pill - Definition
Written by Jason Gordon
Updated at December 16th, 2020
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
-
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
- Courses
Back To: BUSINESS ENTITIES, CORPORATE GOVERNANCE, & OWNERSHIP
Flip-Over Poison Pill Definition
There are many types of poison pills that target device to foil the attempts of acquiring company in a hostile takeover bid. A flip-over poison is a tactic in which shareholders of the existing company are allowed to buy the shares of the acquiring company at a discount. However, this purchase is allowed to take place only if the takeover bid witnesses success. Shareholders buy shares of the acquiring company at a very discounted rate.
A Little More on What is a Flip-Over Poison Pill
The flip-over poison pill allows the shareholders of the target company to buy the shares of the acquiring company at a discount after the takeover bid has been successful. With the purchase, the shares held by the existing shareholders of the acquiring company become diluted. When a company proposes this to the acquiring company, the acquisition becomes unappealing, therefore further negotiations occur between both companies. Before a flip-over poison pill can take effect, it must be included in the bylaws of the acquiring company. The flip-in poison pill is different from the flip-over poison pill, when it is used, shareholders of the existing company are allowed to purchase shares of the target company at a discounted price.
References for Flip-Over Poison Pill
- https://www.investopedia.com Investing Financial Analysis
- https://www.wallstreetmojo.com ... Mergers and Acquisitions
- https://www.divestopedia.com/definition/6547/flip-over-pill
- https://en.wikipedia.org/wiki/Flipover
- https://financial-dictionary.thefreedictionary.com/Flip+Over+Poison+Pill
- https://www.deallawyers.com/blog/2009/03/analysis-flip-in-vs-flip-over-pills.html