The Rise of Anti-Activist Poison Pills

We examine the contractual evolution of poison pill design, focusing on lower ownership triggers, acting-in-concert provisions, and synthetic equity clauses that tailor pills to defend against shareholder activism. Using novel data on hedge funds’ access to SEC filings as a proxy for intervention threats, we find that firms facing heightened activist threats are more likely to adopt anti-activist pills. Relative to comparable firms under activist scrutiny, pill adopters experience fewer subsequent activist interventions and are less likely to pursue activist-favored policies, such as reduced investment and increased buybacks. These findings contribute to policy debates over defensive measures against activist interventions.