Macaroni Defense
An approach taken by a company that does not want to be taken over. The company issues a large number of bonds with the condition they must be redeemed at a high price if the company is taken over.
Investopedia Commentary
Why is it called Macaroni Defense? Because if a company is in danger, the redemption price of the bonds expands like Macaroni in a pot!
Related Links
The Wacky World of M&As
See also: Bankmail, Bond, Greenmail, Lobster Trap, Poison Pill, Redemption, Whitemail
macaroni defense