Poison puts. Issue securities that become valuable only when an unfriendly bidder obtains control of a certain

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Poison puts. Issue securities that become valuable only when an unfriendly bidder obtains control of a certain percentage of a company’s shares. One example is a bond that contains a put option (called a “poison put”) that can be exercised only if an unfriendly takeover occurs. The issuing company hopes that the cashing in by bondholders of a portion of its debt will make the takeover unattractive. LO1

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