Shareholder rights provision
Shareholder rights provision (also known as a poison pill is a provision that allows existing shareholders to purchase additional shares of stock at a price that is lower than the market value if a potential acquirer purchases a controlling stake in the company.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Shareholder rights provision. Also known as a poison pill, it allows existing shareholders to purchase additional shares of stock at a price that is lower than the market value if a potential acquirer purchases a controlling stake in the company.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
