I hear HP is adopting a poison pill. What's a 'poison pill' in a business context?
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I am the OP - thanks for all responses
Poison Pill! Carl Icahn! It's like we're stuck in a 1980's time warp and two companies that would feel right at home in 1985 are duking it out old school. Cue 'Eye of the Tiger'. Where is Gordon Gecko telling us that "Greed is Good"?
Basically HP c— blocked XRX. Icahn in his arrogance didn't think they were savy enough and thought he would do the same thing to HP that he did to XRX and so many other companies. Business leaders have caught on to his shenanigans and you can bet others will invoke the same if he comes after them too.
The poison pill is good for a year and guess what happens next year...the Fuji deal is done and XRX has no manufacturing arm...no products...no business. The fire sale will commence soon enough.
PREPARE YOUR RESUME or PREPARE TO RETIRE, if you can!
A poison pill is when a company adopts rules to prevent them from being acquired. In this case, HP is looking to adopts a provision to prevent any shareholder from owning more than 20% of the shares. That would in theory make it harder for Xerox to go direct to the shareholders. Ar best Xerox could only directly acquire 19% of HP, which would require them to get more shareholders to go along with them to oust the board.
OP, Google "poison pill provision"
HP is starting one of twenty playbooks to deter Xerox from acquiring them. It’s clear, they do not want to be acquired by Xerox. You still may see a merger, but it will be on HP’s terms and with them purchasing what parts of Xerox they see business sense in buying. Long story short, HP will not bow down.