Ok so I have a question regarding a poison pill. Lets say an investor is trying to do a hostile takeover of a company. The company has a policy that anyone who purchases up to 20% of the oustandings will trigger a poison pill and they cannot participate in the rights offering. So would the investor be able to avoid trigerring the poison pill by purchasing only 19% and then having various trusts and funds purchase another 19% each. This way the investor would have 19%, a trust would have 19%, another fund would have 19%, and essentially overtake the majority of the company. Would this be possible?
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Usually you have to disclose how many shares you beneficially own (so if you are subject to Rule 13-d and acquire more shares under a different structure, you must disclose the additional ownership). Likewise, poison pills are usually written with ultimate beneficial ownership in mind.
If the funds are separate and you are operating as a group, you have to do a joint filing and so your group would count as having triggered the poison pill.
There is essentially no such thing as a sponsor-backed hostile takeover in the US anymore. Partially because it's almost always an idiotic thing to do economically for the potential sponsor, but mostly because the laws governing M&A involving public companies are designed to slow down the process and ensure that shareholders get the highest and best price.
Cool, thanks for the responses. So I guess the only way to get around a poison pill is buying taking your offer straight to shareholders and convince them to side with you.
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