People pill

A defensive strategy to ward off a hostile takeover. Management threatens that, in the event of a takeover, the entire management team will resign.

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This is a variation of the poison pill defense.

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Defensive tactic to ward off a hostile Takeover. Management threatens that, in the event of a successful takeover, the entire management team will resign at once, leaving the company without experienced leadership. This is a version of the Poison Pill defense.

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As a variation of the poison pill defense, the people pill is an anti-takeover defense under which the current management team of the target company threatens to quit en masse in the event of a successful hostile takeover.

The effectiveness of a people pill is dependent on the circumstances of the takeover. If the management team is efficient, the company will be left without experienced leadership following a takeover. On the other hand, a great number of takeovers are the result of inefficient leadership in which management will be fired anyway; the people pill will be ineffective in this situation.

See also

• Economics
• Mergers and Acquisitions
• Microeconomics
• Takeover
• Industrial organization

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