Definition

Noun: A defensive strategy or measure adopted by a company's management to make the company less attractive or more difficult to acquire in a hostile takeover attempt.

Usage

This term is used specifically in the context of corporate finance and mergers & acquisitions. It describes legal or financial provisions enacted to deter or prevent an unwanted takeover bid.

Examples

• The board enacted a shark repellent by introducing a poison pill provision.
• One common shark repellent is a staggered board, where only a fraction of directors are elected each year.
• The company's strong shark repellent strategies successfully discouraged the aggressive bid from the competitor.

Advanced Usage

• "Golden parachute" as shark repellent: Extremely lucrative severance packages for top executives that activate upon a takeover, making the acquisition more costly.
• "Supermajority provision" as shark repellent: A charter amendment requiring a high percentage (e.g., 80%) of shareholder votes to approve a merger, making hostile takeovers very difficult to execute.

Variants and Related Words

• Takeover defense (n): A more general term for strategies used to prevent hostile takeovers.
• Poison pill (n): A specific type of shark repellent that allows existing shareholders to purchase additional shares at a discount, diluting the acquirer's stake.
• Porcupine provision (n): Another informal term for a strong set of anti-takeover defenses.

Synonyms

• Anti-takeover measure
• Takeover defense
• Corporate defense mechanism

Related Phrases

• To adopt a shark repellent: The act of implementing such a defense.
  • The company adopted a shark repellent to protect its independence.
• To be shielded by shark repellents: Describes a company protected by these measures.
  • The firm was well shielded by various shark repellents.

Noun

1. a measure undertaken by a corporation to discourage unwanted takeover attempts