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A McDonald's 'Poison Pill'

A McDonald's 'Poison Pill'
Credit...The New York Times Archives
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September 16, 1985, Section D, Page 4Buy Reprints
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The McDonald's Corporation said yesterday that its board of directors had adopted an anti-takeover plan designed to make it more expensive for a hostile bidder to acquire the giant fast-food chain.

Under the terms of the ''poison pill'' plan, if anyone acquired at least 20 percent of the company's shares, or made a bid for at least 30 percent, the owner of each share would have the right to buy one newly issued share of McDonald's stock for an exercise price of $200 a share.

If McDonald's is acquired in a merger or other combination, the owner of each McDonald's share would then have the right to buy stock in the acquiring company worth twice the market value of the $200 exercise price.

Last week, McDonald's was rumored on Wall Street to be a possible target of Philip Morris Inc., which itself has been rumored to be a possible bidder for the General Foods Corporation. But McDonald's said the provision was not adopted in response to any known offer, and was only designed to prevent ''abusive takeover tactics.''

A version of this article appears in print on  , Section D, Page 4 of the National edition with the headline: A McDonald's 'Poison Pill'. Order Reprints | Today’s Paper | Subscribe

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