Netflix Board Adopts Poison Pill Defense to Put the Brakes on Investor

By Rob Scott
November 7, 2012

The Netflix board of directors has adopted a stockholder rights plan known as a poison-pill defense to prevent billionaire investor Carl Icahn from acquiring more shares in the company.
“The stockholder rights plan, approved unanimously by Netflix’s board on November 2, would be triggered if an ‘activist shareholder’ acquired 10 percent of the stock, or an institutional investor bought 20 percent,” reports Bloomberg.
The move is designed to make a potential hostile takeover too expensive, and fend off larger companies such as Amazon and Verizon.
“Netflix has received no takeover offer and has had no discussions with Icahn, said a person familiar with the matter who asked not to be identified because it is private,” explains the article.
Icahn, who owns nearly 10 percent of Netflix’s shares, said in a regulatory filing that the company’s new poison pill was “particularly troubling” and criticized Netflix for “poor corporate governance.”
Last week, analyst Anthony DiClemente of Barclays Capital issued a report suggesting Icahn might have purchased his stake in Netflix with the intent of eventually selling the company. The assertion was based on Icahn’s prior history at Blockbuster and Lionsgate.

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