IBM Lets Sun Set (Linux Journal) [LWN.net]

IBM Lets Sun Set (Linux Journal)

Posted Apr 7, 2009 3:09 UTC (Tue) by iabervon (subscriber, #722)
In reply to: IBM Lets Sun Set (Linux Journal) by pr1268
Parent article: IBM Lets Sun Set (Linux Journal)

Generally, such controls are intended to make the corporation less appealing in a merger/takeover situation, as a way of preventing hostile takeovers. Of course, anything that works against a hostile takeover will work against a non-hostile takeover, because anything that could be undone in order to prepare for a merger could also be undone upon a hostile takeover.

And long-lived companies with volatile stock prices in a market segment prone to bubbles tend to worry more about hostile takeovers (some dotcom startup raising a ton of money, and deciding to buy them some day when the stock is low and there's a lot outstanding) than how they'd do in a merger with a company they want to merge with.

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IBM Lets Sun Set (Linux Journal)

Posted Apr 8, 2009 15:12 UTC (Wed) by Wol (guest, #4433) [Link]

I worked for a company that pulled a poison-pill trick like this. But it was a "this poison wears off" trick. Basically, under UK law, if staff are let go they HAVE to be given a pay-off.

This company I worked for wanted to upset a hostile take-over, because it knew the predator was an asset stripper and wanted to get rid of a lot of the staff. So the company unilaterally modified all employment contracts from the statutory minimum to "one (or it might have been two!) month's pay per year's service". All of a sudden, the cost to the predator of sacking staff doubled or more ...

But the change was only to then-current contracts, so a few years on and a bit of staff turnover later, the poison pill started wearing off.

Cheers,
Wol

IBM Lets Sun Set (Linux Journal)

Posted Apr 9, 2009 14:26 UTC (Thu) by GreyWizard (guest, #1026) [Link]

anything that could be undone in order to prepare for a merger could also be undone upon a hostile takeover

Why couldn't the contracts have clauses to permit the company to cancel the benefits with a few months notice as long as no change of control occurs in that time? (Obviously Sun didn't think that far ahead in this case, but you seem to be arguing that it's not even possible.)