Securities,
Corporate
May 19, 2020
Adopting a ‘poison pill’ in response to the pandemic
The COVID-19 pandemic has taken a toll on the global economy and financial markets. As a result, public companies are increasingly vulnerable to hostile acquirers rapidly building meaningful equity stakes in target companies at depressed prices.
Thomas J. Ivey
Partner
Skadden, Arps, Slate, Meagher & Flom LLP
Email: tivey@skadden.com
Thomas represents clients in a broad range of corporate and securities law matters. He advises public and private companies in complex transactions, including the issuance of equity and debt, mergers, acquisitions, joint ventures, exchange offers and restructurings.
The COVID-19 pandemic has taken a toll on the global economy and financial markets. As a result, public companies are increasingly vulnerable to hostile acquirers rapidly building meaningful equity stakes in target companies at depressed prices. A rights plan — also known as a “poison pill” — is an effective deterrent to opportunistic stock accumulation. It preserves a board of directors’ negotiating position for the benefit of stockholders. Mechanically, a rights pla...
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