Which defence against a hostile takeover is most likely to be upheld in US courts?
Recent decisions in three cases, Household, Revlon and SCM/Hanson Trust, will alter the way in which hostile take are defended in the US. The three cases focused on two takeover defences, the poison pill and the lock-up, and whether directors have the power to adopt them for their companies under what is known as the business judgement rule.
The poison pill is a right which a company distributes to its shareholders as a dividend, to buy preferred shares.
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