Learn the Defense Mechanisms
  
    ๐งช Poison Pill
    
      - Allows shareholders to buy shares at a discount (excluding the hostile acquirer)
- Raises cost for acquirer; dilutes ownership
      ๐ Used by Twitter (2022): Adopted a poison pill to slow Elon Musk's hostile acquisition
      ๐ Considered by Whole Foods (2017): But not used as deal with Amazon was friendly
    
   
  
    ๐ค White Knight
    
      - Target company finds a more favorable buyer to outbid hostile party
- Often preserves management and brand identity
      ๐ Whole Foods (2017): Amazon was seen as a white knight, blocking activist pressure from Jana Partners
    
   
  
    ๐ก๏ธ Crown Jewel Defense
    
      - Company sells off its most valuable business lines to appear less attractive
      ๐ Not used by Twitter or Whole Foods
      ๐ Used by: Vulcan Materials (to block Martin Marietta, 2012)
    
   
  
    ๐ซ Pac-Man Defense
    
      - Target attempts to buy the acquirer
- Rare and requires large capital resources
      ๐ Not used in Twitter or Whole Foods cases
      ๐ Classic Case: Bendix vs. Martin Marietta (1982)
    
   
  
    ๐ฆ Golden Parachute
    
      - Executives receive massive payouts if terminated post-acquisition
      ๐ Used by Twitter: Estimated $90M+ payout to Parag Agrawal and team after Musk's acquisition
      ๐ Used by Whole Foods: Executives received severance and bonus packages