Proponents of the 'poison pills' argue that poison pills do not prohibit all takeovers but enhance the ability of the Board of directors to bargain for a 'fair price'. Comment.

The poison pill technique, sometimes also known as a shareholder rights plan, is a form of defense against a potential hostile takeover. It is a technique by which the target company seeks to make itself less desirable to potential acquirers. A controversial but popular defense mechanism against hostile takeover bids is the creation of securities called "poison pills". These pills provide their holders with special rights exercisable only after a period of time following the occurrence of a triggering event such as a tender offer for the control or the accumulation of a specified percentage of target shares. These rights take several forms but all are difficult and costly to acquire control of the issuer, or the target firm. Poison pills are generally adopted by the Board of Directors without shareholders' approval but the technique is vulnerable to Court review as such considered enhancing the ability of the Board of Directors to bargain for a "fair price" though takeovers cannot be prevented.