The defense tactic in which a target company’s share structure can dilute an acquirer’s stake is called a poison pill, formally a shareholder rights plan.
In a typical flip-in plan, shareholders other than the bidder receive rights to buy additional target shares at a steep discount if the bidder crosses a preset ownership threshold. Because the bidder is excluded, the number of shares held by everyone else rises relative to the bidder’s stake. The takeover therefore becomes more expensive and harder to complete without negotiating with the board.
The phrase does not usually mean that executives simply issue ordinary shares whenever they wish. It refers to rights or warrants attached to existing shares, although older and broader descriptions also include plans involving newly issued preferred stock. The poison pill’s practical purpose is to buy time, strengthen bargaining power, or encourage a competing offer.
A shark repellent is the broader category of anti-takeover defenses. A golden parachute protects executives through change-of-control payments, while a white knight is a friendly alternative bidder—not a dilution mechanism.