Well, the whole idea of poison pills is that, again,
it's when there is no takeover,
there are no poison pills,
but if someone comes and says,
"I'd like to take your company over," then you say, "Fine."
Now, the existing shareholders are
being treated in a preferred way and say, "This isn't fair."
Well, it is, but it is sort of inside the charter of the company.
And so these poison pills are triggered only if there is a hostile takeover attempt.
And that may be,
let's say that you can offer
your stock to the existing shareholders at
the bargain basement price that is below the market.
So these people accumulate larger blocks of shares and
effectively prevent the bidder from getting control.
Or in some cases,
you may go ahead and make offers to even
buy this stock of the bidder on some terms.
So, but this whole idea again,
so if you went ahead and made a takeover,
then you swallow this poison pill and that
becomes unfortunately more expensive and more headache for you.
And the next thing here that I would like,
that I guess is worthwhile discussing,
this is so-called dual class recap.
So that is part of the broader class of strategies in M&A transaction.
This is restructuring or reorganization but dual class recap is as follows.
So there are various kinds of shares of voting stock.
So, some of them are just plain stock,
but some have superior voting rights.
All that happens before the offer.
So this sits in their charter.
And these super voting shares of stock,
they normally belong to the big stakeholders in this company.
So, sometimes if you buy,
it is difficult for you as a bidder to buy stock from these special guys.
And, therefore, if you buy a lot of stock from all other smaller people who don't care,
then still you cannot enjoy majority.
So, all these things,
they indeed are sort of an unfair or discriminatory treatment
of the bidder as a way of takeover defense.
But they're all prepared before the offers.
So, to some extent,
you can say, "Well, this is discriminatory,
but this is not unfair," because anyone can know what's going on
if this company comes in and makes a tender offer.
In the next episode, however,
we will go on and see what can happen after the hostile offer has been made.