Tactic used by the target of a hostile takeover in which a company makes itself less desirable by borrowing a large sum of money and distributing it to its shareholders, by either initiating a buyback program or paying larger than normal dividends. In this way, the company might be able to scare away undesirable acquirers who do not want to take on so much debt, while at the same time retaining shareholder interest in the company (in spite of it being so heavily leveraged).

Copyright©2009 by InvestorWords.com. ALL RIGHTS RESERVED.

Reproduction of all or part of this glossary and/or this page, in any format, without written consent is prohibited. If you have questions about this dictionary please feel free to contact us feedback\@\investorguide.com