A shareholder rights plan allowing existing shareholders to buy or sell shares at very attractive prices provides the acquirer an inexpensive way for takeovers.

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A shareholder rights plan, also called a "poison pill," is designed to make a company less attractive to potential acquirers by diluting the value of the company's shares or making them more expensive to acquire. It typically includes provisions that allow existing shareholders the right to buy or sell shares at a discounted price, making it more difficult and expensive for an acquirer to gain control of the company. So, it does not provide an inexpensive way for takeovers.

A Shareholder Rights Plan Allowing Existing Shareholders to Buy or Sell