Contingent issuance

A contingent issuance refers to a possible issuance of common stock that will occur only if certain conditions have been satisfied. A business may set up a contingent issuance in order to make it more expensive for a hostile acquirer to buy it; thus, an event such as an offer to buy a majority of the shares outstanding will trigger the automatic issuance of more shares to existing shareholders, which the hostile acquirer must then purchase.

Related Courses

Mergers and Acquisitions