Scorched Earth Policy
An anti-takeover strategy that a firm undertakes by liquidating its valuable and desired assets and assuming liabilities in an effort to make the proposed takeover unattractive to the acquiring firm. Investopedia Says:
In extreme cases, this strategy might end up being a 'suicide pill'.
The scorched earth policy is actually a classic military strategy: generals would instruct troops to burn any land/crops/trees as they retreated so there would be no supplies to refresh the advancing army. Related Terms:
Busted Takeover
Enterprise Value
Hostile Takeover
Jonestown Defense
Management Buyout - MBO
Merger
Poison Pill
Sandbag
Saturday Night Special
Shark Repellent
Sleeping Beauty
Suicide Pill
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