What is ‘Dead Hand Provision’
A stipulation on a defense mechanism (or poison pill) used by companies in order to protect against a merger or takeover by another company. The dead hand provision prevents the removal of the poison pill, a strategy used to discourage a hostile takeover, even if shareholders of the target company favor the takeover.
Explaining ‘Dead Hand Provision’
A dead hand provision states that only the original directors who put the provision into place can dismantle the pill, so any new directors are prevented from interfering.
Further Reading
- Death Toll for the Dead Hand: The Survivability of the Dead Hand Provision in Corporate America – heinonline.org [PDF]
- Is There Power Behind the Dead Hand? An Empirical Investigation of Dead Hand Poison Pills – papers.ssrn.com [PDF]
- Dead Hand Proxy Puts, Hedge Fund Activism, and the Cost of Capital – papers.ssrn.com [PDF]
- Katrina: Private enterprise, the dead hand of the past, and weather socialism; an analysis in economic geography – www.tandfonline.com [PDF]
- Dead Hands-Poison Catalyst of Strength-Enhancing Megavitamin–An Analysis of the Benefits of Managerial Protection and the Detriments of Judicial Interference – heinonline.org [PDF]
- Preventing control from the grave: A proposal for judicial treatment of dead hand provisions in poison pills – www.jstor.org [PDF]
- Just Say Never-Poison Pills, Deadhand Pills, and Shareholder-Adopted Bylaws: An Essay for Warren Buffett – heinonline.org [PDF]
- Precommitment Strategies in Corporate Law: The Case of Dead Hand and No Hand Pills – heinonline.org [PDF]
- The dead hand of the Treasury: The economic and social development of the Trucial States, 1948–60 – www.tandfonline.com [PDF]
- Dead Hand Proxy Puts and Shareholder Value – www.jstor.org [PDF]
