The Legal Analysis Of Poison Pill

The corporate arti-takeover measure is correlative with takeover, especially with hostile takeover, which means a series measures aim to avoid or frustrate the takeovers that the target corporate managers take to prevent the transfer of corporate control.As an important way to defend corporate takeovers, poison pill has been fully developed toward perfection in the board-centered America, and a complete judicial review system for its legality has been established by a series of cases.The affection of the fifth overweening worldwide merger and acquisition tide, the completion of the national reforming of listed companies share structures, as well as the adoption of the new Corporate Law and Securities Law, jointly foresee that the takeover and anti-takeover activities of our listed companies are faced with a coming profound reform. After the implementation of the new Listed Companies Takeover Management Act on September 1St,2006, anti-takeover measures are still mainly regulated by Article 33, according to which, how to adopt and regulate preventative anti-takeover measures by boards of listed companies before tender offer still remains an unsolved problem.Considering such a problem, based on the analysis of the definition, characteristics, development and classifications of anti poison pill, this article argues its judicial and positive value. According to Chinese domestic market environment and legal regulations, this article tries to debate how to implement poison pill in our legal system, which born with subjective legitimacy and objective legitimacy. Based on such analysis and considering American mature market anti-takeover practices and its developed anti-takeover judicial review system, and also taking into consideration that poison pill has the rational and irrational characteristics, this article tries to build up and develop our business judgment rules and discuss to set up our judicial review system to examine poison pill.