Defensive Tactics for Hostile Takeover─ Focusing on the Types and Legality of Poison Pills

• Main Authors: WU,PEI-GUEI, 吳佩桂
• Other Authors: LIN, KUO-BIN
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/79264537232977482711

碩士 === 國立臺北大學 === 法律學系一般生組 === 97 === Chapter One: Preliminary While there are many literatures discussing the defensive measures in a general way, the author of this thesis focuses intently on Poison Pill, the most useful and effective defensive tactic in American. The author details the types, court’s opinions and related regulations about poison pills in American. Moreover, the author tries to infer the legality of poison pills in our county. Chapter Two & Three: The Classification of Defensive Tactics & The Mechanics and Features of Poison Pills In order to get a comprehensive understanding of the nature of defensive measures, the classification of defensive tactics is introduced in the beginning. Then, the tactic of Poison Pill is presented. Its definition, function, pros and cons, and the authorities adopting it are described in detail. Chapter Four: The Types of Poison Pills In America, the tactic of poison pills could be roughly divided into two types—the standards and the variations. The court of Delaware declared the basic and commonly used poison pills, Flip In and Flip Over, valid. However, these standard poison pills do not prevent a raider from conducting a proxy contest to unseat the board. As a result, the variations, Dead Hand and No Hand, were developed to make up for the defect. Dead Hand was a tactic that only the continuing boards could redeem the poison pill. No Hand was a deferred redemption pill, which was redeemed only after a certain period of time. However, the Delaware court had invalided the Dead Hand and No Hand under the Delaware General Corporation Law. Chapter Five: The Efficiency of Poison Pills The Court decided the efficacy of poison pills through the Business Judgment Rule (BJR) and the Enhanced Scrutiny (ES). If the boards of a target corporation adopted defensive tactics before the hostile takeover took action, the court should apply BJR as judicial scrutiny. On the contrary, if defensive measures were adopted after a raider attacked, the court should apply ES to examine the legality of the adoption by the boards of the target company. Chapter Six: The Legality of Poison Pills in Our Country Here, the practicability of poison pills under our domestic laws is discussed in two ways. One is granting dividends to shareholders, and the other is offering securities or private placement. It is subsequently found that adopting stock purchase pills through granting dividends and offering securities is unworkable. However, non-public offering the preferred stocks, convertible bonds, warrants, and debt with warrants are feasible ways to adopt stock purchase pills in our country. Chapter Seven: Conclusion In the author’s opinion, the useful and effective defensive tactic in American, Poison Pill, could also be used in our country in some ways.