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Ask this question: How would you identify a poorly performing firm? How would you estimate the synergies from acquiring it?

Do peer review of this question: Suppose that you are the lead director of a company, and the CEO is also its founder.  She is strongly opposed to takeovers, and has suggested adopting a shareholder rights plan (i.e., a "poison pill').  How would you determine whether the adoption is appropriate, and what would you suggest to the rest of the board?

Peer’s answer:  In my opinion, if the CEO planned to adopt a shareholder rights plan to counter takeovers, I would try to analyze that whether the plan could make the company less attractive to the buyers. If this plan were useful and it could protect the company from merger, I would suggest the rest of the board to oppose to takeovers. I will suggest the rest of the board to oppose to takeover only because the company is still in a good shape and it can continue operating healthy in the future. If the company were losing money and there were nothing the management could do to save the company, no matter the shareholder rights plan could lower the interest of buyers or not, I would suggest the rest of the board to accept takeovers.