SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : VLSI Technology - Waiting for good news from NASDAQ !!!
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Hermann Ragaller who wrote (5539)3/5/1999 1:16:00 PM
From: DanZ  Read Replies (3) of 6565
 
<Can somebody with better English knowledge (or just better working brain) explain what this sentence means? I don't understand this kind of poison pill.>

The pill will delay VLSI's shareholders' ability to receive Philips' consideration until it can replace the California computer chip maker's board with new members, ..."

Poison pills are designed to make it prohibitively expensive for an acquiring company to complete the buy out of another company. In most cases, the target company does this by issuing a large amount of convertible stock with a low exercise price to existing shareholders. This dilutes the common stock from the acquirer's perspective and makes it prohibitively expensive for them to complete the transaction.

...will delay VLSI's ability to receive consideration

means that the poison pill will delay Philips' ability to complete the transaction quickly because they will have to spend time fighting it. By consideration, they mean their $17 offer. There are two things to be said for this. Shareholders might not care about the delay if they think there is a good chance that a higher bid is forthcoming, either from Philips or another suitor. Second, I don't think that 17 is fair consideration when one can sell their stock on Nasdaq for 18 3/16. I don't think anybody else here would either.

I hope this answered your question.

Dan
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News