The Rise of Anti-Activist Poison Pills

64 Pages Posted: 24 Aug 2022 Last revised: 14 Jan 2023

See all articles by Ofer Eldar

Ofer Eldar

University of California, Berkeley - School of Law; European Corporate Governance Institute (ECGI)

Tanja Kirmse

Drexel University

Michael D. Wittry

Ohio State University (OSU) - Department of Finance

Date Written: November 7, 2022


We provide the first systematic evidence of contractual innovation in the terms of poison pill plans. In response to the increase in hedge fund activism, pills have changed to include anti-activist provisions, such as low trigger thresholds and acting-in-concert provisions. Using unique data on hedge fund views of SEC filings as a proxy for the threat of activists' interventions, we show that hedge fund interest predicts pill adoptions. Moreover, the likelihood of a 13D filing declines after firms adopt "anti-activist" pills, suggesting that pills are effective in deterring activists. The results are particularly strong for "NOL" pills that, due to tax laws, have a five percent trigger. Our analysis has implications for understanding the modern dynamics of market discipline of managers in public corporations and evaluating policies that regulate defensive tactics.

Keywords: Poison pills, activism, hedge funds, market for corporate control, takeovers

JEL Classification: G30, G34, K22

Suggested Citation

Eldar, Ofer and Kirmse, Tanja and Wittry, Michael D., The Rise of Anti-Activist Poison Pills (November 7, 2022). European Corporate Governance Institute – Finance Working Paper No. 869/2023, Fisher College of Business Working Paper No. 2022-03-007, Charles A. Dice Center Working Paper No. 2022-07, Duke Law School Public Law & Legal Theory Series No. 2022-48, Available at SSRN: or

Ofer Eldar (Contact Author)

University of California, Berkeley - School of Law ( email )

215 Law Building
Berkeley, CA 94720-7200
United States

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

Tanja Kirmse

Drexel University ( email )

3141 Chestnut St
Philadelphia, PA 19104
United States

Michael D. Wittry

Ohio State University (OSU) - Department of Finance ( email )

854 Fisher Hall
2100 Neil Avenue
Columbus, OH 43210-1144
United States
614-292-3217 (Phone)


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