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Netflix Terminates ‘Poison Pill’ Plan, Which Was Designed to Ward Off Hostile Takeover

Billionaire Carl Icahn sold half his stake in Netflix in October, now holding 4.5% of the company's shares

Netflix announced Monday that it has terminated its stockholder rights plan — known as a poison pill, designed to prevent a hostile takeover — two years early, after billionaire investor Carl Icahn cut his stake in the company in half.

Netflix adopted the plan in November 2012, after Icahn bought shares amounting to a 9.98% stake. Under the poison pill provision, if any individual investor acquired more than 10% of Netflix stock every other shareholder would be eligible to purchase discounted stock (thereby diluting the equity of the poison-pill initiator).

In October 2013, Icahn filed to sell nearly 3 million shares of Netflix, citing a 457% return on his investment, after which he owns 4.5% of the company’s shares.

On Monday, Netflix said the shareholder rights plan was amended to accelerate the expiration date to Dec. 30, 2013, effectively terminating the plan. It was originally set to expire on Nov. 2, 2015.

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