Definition Poison Put. Description.
A Poison Put in Corporate Finance is a provision in a
corporate bond or note that
gives its holder the option of redeeming the bond or note at its (high) par
value if certain events occur. These events may include a restructuring, the
payment of a large dividend or an unfriendly takeover.
Poison-put bonds can act as an anti-takeover mechanism because they discourage acquiring companies by raising their expenses.
They also protect the bondholder from the deterioration of credit quality and credit rating that might result from a leveraged buyout that added to the issuer’s debt.
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Poison Puts Special Interest Group
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List of Anti Hostile Takeover Mechanisms
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