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scorched-earth policy
scorched-earth policy (skôrcht′ûrth′)n. The policy of devastating all land and buildings in the course of advancing or retreating troops so as to leave nothing salvageable to the enemy.Thesaurus| Noun | 1. | scorched-earth policy - the target company defends itself by selling off its crown jewelsporcupine provision, shark repellent - a measure undertaken by a corporation to discourage unwanted takeover attempts |
Scorched-earth policy
Scorched-earth policyOften used in risk arbitrage. Any technique a company that has become the target of a takeover attempt uses to make itself unattractive to the acquirer. For example, it may agree to sell off its crown jewels, or schedule all debt to become due immediately after a merger.Scorched Earth PolicyAn antitakeover measure in which a company sells many or all of its "good" or desirable assets and/or issues an extraordinary amount of debt. A scorched earth policy is designed to make the company less attractive to potential acquirers. The obvious disadvantage to a scorched earth policy is the possibility that, even if the company remains independent, it may have acquired so many liabilities that it may not be able to maintain its operations easily. See also: Poison pill, Suicide pill.scorched-earth policy
Related to scorched-earth policy: Hundred DaysWords related to scorched-earth policynoun the target company defends itself by selling off its crown jewelsRelated Words- porcupine provision
- shark repellent
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