Flip-in provisions allow holders of rights to acquire stock in the target, as opposed to flip-over rights, which allow holders to acquire stock in the acquirer.

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Flip-in provisions indeed enable rights holders to purchase shares in the target company at a discount, typically as a defense mechanism against hostile takeovers. Conversely, flip-over rights allow rights holders to buy shares in the acquiring company, usually after a merger or acquisition is completed, as a deterrent against unsolicited takeovers.

Flip-In Provisions Allow Holders of Rights to Acquire Stock in the Target