©2001 Prentice Hall Takeovers, Restructuring, and Corporate Governance, 3/e Weston - 63 Poison Puts Definition: Poison puts or event risk covenants give bondholders right to put, at par or better, target bonds in event of change in control –Protect against risk of takeover-related deterioration of target bonds Especially when leverage increases are substantial Began to be included in bond covenants in 1986 –Place potentially large cash demands on new owner, raising costs of acquisition
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