Basic information on financial databases: cook books, tips and tricks & economic news

This blog contains schematic easy to grasp - hands on - help in performing searches in economic databases, making work sets and making them inter-exchangeable between the databases.

* Disclaimer. I am not a finance professional. Most posts are the result of personal findings.

All presented images are scaled and can be enlarged to original size (click the picture).

Search This Blog


Poison Pills

Poison Pill: a tactic used by companies that are threatened by a hostile take over that ensures any take over will result in events that substantially reduce the value of the company. I.E. selling a valuable assets to a friendly company / bank or the issue of securities with a conversion option enabling buyer's to purchase at reduced price. See also porcupine provisions* and staggered directorships**.

Also, even if shareholders actually support the take over, the board of directors could decide to follow a poison pill strategy (just say no defense). In current days, with increased hostile activity, it can be expected that companies will continue just say no defenses, even in spite of their own shareholders, and following law suits, between suitors and target company. (see also: "How courts see the Just say no defense, Investment Dealer's Digest, 2010, vol. 076, iss, 10, pg. 22.)

An extreme version of poison pills are the so-called Defensive Scorched Earth policies.
A reaction to a takeover attempt that involves liquidating valuable assets and assuming liabilities in an effort to make the proposed takeover unattractive to the acquiring company. Read more:
Any measures are valid to discourage take over, e.g. getting a loan at an exhorbitant interest rate.
Method SDC: Mergers and Acquisitions  US + NON-US ; dates ; Search ; All items  : search word: "scorched" ; select ; close ; Execute ; Custom Report ; add any report items you wish like name, state, status, synopsis etc.

Poison pills data are hard to get.
Our library does not have a specific database that does.

SDC has got some poison pills data types in the Mergers and Acquisitions section, but most won't provide data (license).
A usefull way of retrieving data on poison pills is a work around starting off with SDC Mergers and Acquisitions and ending in Lexis/ Nexis, which one database that does provide poison pill data.
(this part is pending)
Path in SDC:
Mergers and Acquisitions > set time scale > choose TAB 'all' > search word poison or (scorched earth) > close > execute > Tab top bar Custom Report > Set preferences (see figure)


For a basic introduction to SDC, click here (M and A search)
All SDC contributions on this blog can be found here

*) Porcupine provisions. (shark repellents)
Provisions made by companies to discourage take over bids.

**) Staggered directorships. To prevent hostile take overs. If the company makes clear that directors can't be removed from office as a result of the take over, without due cause, a bidder can't gain control of  the board for some time, even with a controlling interest in shares capital.

No comments:

Post a Comment