Legal Definitions - crown-jewel defense

Crown-jewel defense is a strategy used by a company to prevent a hostile takeover. It involves selling off the company's most valuable assets to a third party if a hostile bid is made. This makes the company less attractive to the potential buyer.

For example, if a company is being targeted for a takeover, it may sell off its patents, trademarks, or other valuable assets to a third party. This makes the company less valuable to the potential buyer, and may discourage them from pursuing the takeover.

Another example is if a company has a valuable subsidiary, it may sell that subsidiary to a third party to prevent the hostile takeover. This can make the company less attractive to the potential buyer, and may discourage them from pursuing the takeover.

These examples illustrate how crown-jewel defense can be used to protect a company from a hostile takeover. By selling off valuable assets, the company becomes less attractive to the potential buyer, and may discourage them from pursuing the takeover.