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Netflix Gives Raider Icahn Poison Pill, Protects Itself from Buyout Until 2015

Photo of Beth Hanna By Beth Hanna | Thompson on Hollywood November 5, 2012 at 1:52PM

Netflix is protecting itself from takeover-hungry Carl Icahn. On November 5 Netflix CEO Reed Hastings announced that the company has a new three-year stockholder rights plan, allowing it to allocate one "right" to each of its outstanding shares, making Netflix's seizure more difficult by outside parties.
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Netflix's Reed Hastings.
Netflix's Reed Hastings.

Netflix is protecting itself from takeover-hungry Carl Icahn. On November 5 Netflix CEO Reed Hastings announced that the company has a new three-year stockholder rights plan, allowing it to allocate one "right" to each of its outstanding shares, making Netflix's seizure more difficult by outside parties.

This method, called a "poison pill," also forces a corporate raider who tries to purchase more than 10% of the company's shares to negotiate directly with the company's board. The LAT has details.

This move comes not a moment too soon, as corporate plunderer Icahn announced last week that he had acquired almost 10% of the online video streaming and DVD service. So far Icahn has also made moves on Time Warner, Blockbuster and Lionsgate, and is known for making billions via large buyouts and pressuring companies' management to change strategy mid-stream, sell or buy him out at a premium.

Interestingly, Icahn says he believes that Netflix, which has been making a rather awkward transition from DVD rental to online streaming service, is a well-positioned company for the media future.

Netflix's new rights plan expires on November 2, 2015.

This article is related to: Netflix, News, Carl Icahn


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Thompson on Hollywood

Born and raised in Manhattan, Anne Thompson grew up going to the Thalia and The New Yorker and wound up at grad Cinema Studies at NYU. She worked at United Artists and Film Comment before heading west as that magazine's west coast editor. She wrote for the LA Weekly, Sight and Sound, Empire, The New York Times and Entertainment Weekly before serving as West Coast Editor of Premiere. She wrote for The Washington Post, The London Observer, Wired, More, and Vanity Fair, and did staff stints at The Hollywood Reporter and Variety. She eventually took her blog Thompson on Hollywood to Indiewire. She taught film criticism at USC Critical Studies, and continues to host the fall semester of “Sneak Previews” for UCLA Extension.