Poison Put

Provision in an Indenture giving bondholders the privilege of redemption at Par if certain designated events occur, such as a hostile Takeover, the purchase of a big block of shares, or an excessively large dividend payout. Poison puts, or superpoison puts as the more stringent variations are called, are popular antitakeover devices because they create an onerous cash obligation for the acquirer. They also protect the bondholder from the deterioration of credit quality and Rating that might result from a Leveraged Buyout that added to the issuer's debt. See also Event Risk.