Lex is a premium daily commentary service from the Financial Times. It helps readers make better investment decisions by highlighting key emerging risks and opportunities.
Two icons of the 1980s collided last week when J.C. Penney Co. Inc. instituted a poison pill. Time will tell if the retailer is dead, but the legal fight over poison pills is over. The measure, designed to prevent hostile takeovers, has been extremely controversial but is now perfunctory to the point of banality. The J.C. Penney announcement hardly elicited a yawn, let alone cries of corporate perfidy. This is as it should be. Not only is the legal question settled, but poison pills can play a useful role in protecting shareholders. Investors are better concerned with staggered boards and supervoting shares.