A poison pill is a takeover defense in which a target firm finds an acquirer more to its liking than the initial hostile acquirer and prompts the two to compete to take over the firm.

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A poison pill is a defensive strategy used by a target company to prevent or discourage a hostile takeover by making its stock less attractive to the acquirer, often by allowing existing shareholders (except the acquirer) to buy more shares at a discount, diluting the potential acquirer's stake.

A Poison Pill Is a Takeover Defense in Which a Target