Fact Pattern 41-2B
Mega Corporation wants to gain control of MiniCo,Inc.The companies negoti?ate for several months,without coming to terms.Mega decides to pursue a takeover at?tempt.MiniCo decides to resist.
-Refer to Fact Pattern 41-2B.MiniCo issues shares that its shareholders can exchange for cash if a takeover is successful,intending to make Mega's takeover attempt too expensive.This is a

Question

Fact Pattern 41-2B 
Mega Corporation wants to gain control of MiniCo,Inc.The companies negoti?ate for several months,without coming to terms.Mega decides to pursue a takeover at?tempt.MiniCo decides to resist.
-Refer to Fact Pattern 41-2B.MiniCo issues shares that its shareholders can exchange for cash if a takeover is successful,intending to make Mega's takeover attempt too expensive.This is a

Quizplus · Accepted Answer

MiniCo's action of issuing shares that its shareholders can exchange for cash if a takeover is successful is known as a poison pill defense. This defense is aimed at diluting the value of the company's shares and making the takeover attempt more expensive for the acquiring company. Crown jewel defense involves the sale of a company's most valuable assets, Pac-Man defense involves the target company making a counter-bid for the acquiring company, and white knight defense involves the target company seeking an alternative friendly acquirer. However, none of these defenses are mentioned in the fact pattern.