Reuters and Yahoo Finance - reporting on the attempted hostile takeover of Dutch KPN by America Movil - quoted EuroFinUse’s advice to shareholders against poison pill plans.
These defensive tactics, or shareholder rights plans, are used by corporations’ board of directors against hostile takeovers in order to prevent takeover bidders from negotiating directly with shareholders, and instead forcing bidders to negotiate with the board. In this case Mexico’s America Movil was forced to the negotiating table by the Dutch competitor KPN after a foundation charged with protecting the group exercised a call option on preference shares that gave it half the company’s voting rights.
EuroFinUse advised the shareholders to vote against poison pill plans if they last for five years or more, can be renewed automatically and if they are triggered by third parties taking stakes of below 15 percent.