Crown Jewel Defense
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In business, when a company is threatened with takeover, the crown jewel defense is a strategy in which the target firm sells off its most attractive assets to a friendly third party or spin off the valuable assets in a separate entity. Consequently, the unfriendly bidder is less attracted to the company assets. Other effects include dilution of holdings of the acquirer, making the takeover uneconomical to third parties, and adverse influence of current share prices.
[edit] An example from Japan
In 2005, Japan’s Livedoor warned the Nippon Broadcasting System Inc against the adoption of a “crown jewel” takeover defense. Livedoor called upon the target company to retain the key assets of the radio broadcast station while it battled Fuji Television for takeover bids; the assets included major stakes in Fuji TV, Japan’s top television network, and music label Pony Canyon.
[edit] See also
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