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The scorched-earth defense is: a form of risk arbitrage and anti-takeover strategy.

When a target firm implements this provision, it will make an effort to make itself unattractive to the: hostile bidder. For example, "a company may agree to liquidate." Or destroy all valuable assets, also called crown jewels,/schedule debt repayment to be due immediately following hostile takeover. In some cases, a scorched-earth defense may develop into an extreme anti-takeover defense called a poison pill.

See also※

• Scorched earth

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